Appendix — Panhandle E. Pipe Line Co. v. Fed Power Comm.
Supreme Court brief1944
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- Vol. 1”
~ TRANSCRIPT OF RECORD
N° qPages 1025 to 1520). -
See cee tone me
Supremi Court “ the United States
: _ OCTOBER TERM, 1944 ie ere
ee
"No. 296 - 3
¢ ki
O
PANHANDLE’ EASTERN? PIRE) LINK COMPANY, |
| [LLINOIS, NATURAL GAS COMPANY AND MICHL-
GAN GAS TRANSMISSION CORPORATION, PETE
TIONERS, at oe
- US. , ae Tay
FEDERAL POWER COMMISSION, CITY: OF" DE:
- “TROIT, COUNTY OF WAYNE, MICHIGAN, ET AT.
a.
. ee
\N WRIT OF CERTIORARI’ TO THE v NITED. RTATES CIRCUIT, COURT
"OF APPEALS FOR TUE FIG HTH Chtcr [Tr *
©
’ -—
4 a ; > - - + a.
A . Gc. . 4
*, . 7,
we U :
a o
Tr
- PETITION FOR CEKTIORARI send 28, 1944.)
‘CERTIORARI GRANTED JANUARY 3, 1945.
VOL:
~ TRANSCRIPT OF * RECORD.
- United States Circuit Court of Appeals.
EIGHTH CIRCU IT.
os Ne RMB Oe
\ : .
PANHANDLE. EASTERN: PIPE LINE COMPANYY A
CORPORATION, JLLINOIS NATURAL GAS:
- COMPANY, A CORPORATION, AND MICHIGAN -
GAS TRANSMISSION CORPORATION, A. COR.
, PORATION, PETITIONERS,
VS. , i
FEDERAL POWER COMMISSION, CITY OF DETROIT,
~ MICHIGAN, COUNTY OF WAYNE; MICHIGAN,
- MICHIGAN CONSOLIDATED: Gas COMPANY
A CORPORATION, AND -MICHIGAN PUBLIC
SERVICE COMMISSION, HESPONDENTS
é
<\ . .
. PETITION TO REY 1EWea ND SET ASIDE GRDE R OF FEDER AL
: > POWER € ‘UMMISSION.
.. FILED FEBRUARY 6, 1943.
= ~—_
. : Ne!
a3 -@
’ a : /
a ee ;
- ie U nited Statés ee Court of Appeals
: ee «EIGHTH CIRCUIT. :
y ; - | > Le * ; ‘
Mm. Ale ae ee Nel 12 M6.
"> PANHANDLE EASTERN. PIPE LINE COMPANY, A
: CORPORATION, J LULINOIN,S NATURAL GAS
COMP ANY, A CORPORAT TON, AND MICHIGAN
— GAS TRANSMISSION. CORPORATION, A ‘COR-
2 PORATION, PETITIONERS, ‘
oh ees tery aie “ae Vs. ee ‘ :
+ CPEDERAL POWER COMMISSION, CITY OF DE TROT,
oe». ‘
pa
a MICHIGAN, COUNTY OF WAYNE, MICHIGAN,
MICHIGAN. CONSOL IDATED GAS COMPANY;
A CORPORATAOQ AND MICHIGAN PUBLIC,
- FSERVICK COMMASSION, RESPONDENTS. the 2 oe
: PE TTS TO REVIEW AND SET ASIDE ORDER OF FEDERAL
aber cor. . POWER ¢ OMMIBSSION, LF ; :
PILED PEBRLARY 6, 1943. — =
‘Index, Volume I.
- : : : A “aay Original Print.
= . ‘ :
Ms Petition of Panhandle Eastern Pipe Line Company, Illinois
es J Ngtural Gas Company, and? Michigan Gas Transoyssion ¢ar-
‘ poration te review and set aside an order of the Federal Pawer .
2 :
5 = ommission cp A 1
af Nature of proceedings as to which review je sough e ae 2
a Facts and statute upon which venue ds based f 6
og Points ‘on which petitioners intend to rely... >... a 6
' Exhibit A, Opmion No. 80 of Federal Power Commission. . a 20
ae y [ . theta
Se i
aS r
: |
4
4 .
“3 ; sar - | Original Print ser
* Order of Federal nian Commigaien . re: Juving rates, = <4
September 23, 1942. . ' ‘ : 3 3s I,
Exhibit B, Order of Federal Power re ommission extending
time within which to file new 8c hedules of rates andl c harge Ss, lar.
October 12, 1942 m vy 43
‘Transcript of Testimony, before Federal Power Commission... l 45
Testimony ad ; . : 19- 46.
Manfred K. Toeppen dees Ween : 3 19 46
‘C/H.M. Burnham... r <i A
RofusM. Smith’ ay ROS 421. 136
Glenn G. Bartle ve Ae. a ”
- R.d..Wallace - i ee ae a
Louis Fena Sperry ee eo 452 139
Cecar W itiam Morton =; ce .- . Sr 181 ‘
P. McDonald Biddison : ‘ 491 159
©. W. Morton, resumed : ; ; aoe 22 200
» . CR. Hinton, Lede . 653 209
.. C,H. M. Burnham, resurned ae”
Leith V. Watkins aS erp 856-265
Minutes of meeting of Board of Directors of Panhandle °
astern Pipe Line Cc ompany of September 3, 193G 896° (285
\. David: Friday ; ea Ate heey
~ P. MeDonald Biddison, resume: ae, we A. - O82. 331
_ Paul Brown Coffman - f. 995 338,
= McDonaki Biddisen, resumed | ie 11-430
_H, Hinton, resumed we 1305 487. -,
. MeDonald Bi i ligon, resumed aes, 1408 494 .
‘Leith V. Watkins, resuined : 1470 509
‘ ore Index, Volume H }
Lows Feng Sperry, recaile — ; ; ire 1493 521
Ralph EB. Davis ails 1496. 5220.
J_D. Creveling. Teves one. a
_: “George S. Young Pg Wid. = 578
‘ “Henry C len. : J 1678 584
Howard 8. Riddle . . 1682 , 587
- Francis S..Haberly : ; 1718-60?
' Fred A. Spitznagle ~~ . Sire til = 633—i
vi reorge So Young, resumed ; re ts ee to
~ Robert 8. Drew: i -.. 1911 667
; Francis ©. Haberly, resumed “1633. 672 O°
Fred A. Spitznagie, resumed ‘' 1952° 682
"Daniel C.Green ! - 1971-691
Walter C. Beckjord aces ; ". 2016 706 +
P. M@Donald Biddison, resumed j ct. 712.
: Excerpt from Exhibit 62. + . 2627 789
©. W. Morton, resumed. . y Pee tate wit 892
Le tter, 0. WwW. Morton to G. J. Neuner, August 19, 1941 sf 3142 996
: Index, Volume HT. |
P McDonald BiddhQy resumed. 3316 1049
: Letter, J. D. Creveling to Leon M. ‘Fuquay, July 23, are.
a: of OER | 2643 1053”
AW
Original Print
a’ Letter; Leon M. Fuquay to JOD. a July 26, :
Ms. «5. 4 3645 1054 -
Telegram, Panhithdle Fastern Pipe ioe. Company te
Leon M. Fuquay, July 28, 1941 3646 1055
Exhibit 39-A, Statement relating to Reprostuc tion C ost A ,
New of Fiant, Property and Businéss of Panhandle
‘Eastern’ Pipe Line Company, ete... . .. . 3785 1075
‘Rufus M. Smith, resumed °~ . ; ie ,. 4113 1144
C. U. Hinton, tesumed. . . .- pipette ings . 4165-1174 -
--Ralus MU Smith, resumed” =. ae .... 4187 179
Glenn G. Bartle, resumed... : .. 4852 1271
Louis F. Sperry, resumed .~ cis ‘....¢. 4560 1307
( H. Hinton, resumed y ; Say Oe eee, |.
Index, Volume 1V. St
_ H M. Burnham, resumed ots e: . 5939 1929
Ander, Volume " ‘
Leith Watkins, resumed... eesti Say “6163 2087.
Paul B. ¢ Coffins an, re hana . 3
A 6534 2211
Index, | Volume VI. 4
Leith V. Watkins, resumed cow Lo 7 ae
trite rt, Ralph M. Shaw to it Path k P. Parrish, October 2...
AS sce \. gue y 7385: 2654
Paul B. Coffman, resume at Pie ee ¥ 7451 © 2663
. George §, Young, restimed stent 7933 = 2806
‘Henry C. Lehn, résumed. : : ‘8037 2857
F.S.Haberly, resutned ; ‘ ; . SO70 = 2874
Fred A.-Spitznagle, resumed.” “, S172. 2921
Limitation Order@L-31, “To Curtail Consuinption of o
Natural Gas’. i ee $272 2950,
Exhibit A, Areas subject to prohibitions contained jn. ;
paragraph (e) of Limitation ke .. 8280 2956
Robert 8. Drew, resuthed ; B ae : 2. 6©§3660 2998
ae . ten, Volume Vil.
ret Ao Spitzniugle, resumed S461) . 3050
George Ss. Young, resumed » 8525 3062
; Crder ef Securities and Exchange Cermnussion In the _ .
j Matter of Columbia Gas & Eleetrie Corporation, etal. 8555 3078
Damel C. Green, resumed: R S558 = GORD
~RoberteS.- Drew, resumed an 8706 = 3169
-Fred A. Spitznagle, resumed . wee oe i a
Robert 8. Drew, resumed... PORT per ee 741 3188
Leith V. Watkins, resumed. ik a 8&S7 =. 3208
Order of Federal Power Commission | denying epelie ation
» for Extension of-Time for Compliance with the provisions
- of Gas Plant Accounts Instruction 2-D of I ‘niform System
. Of Accounts and Commgssion’ s Order No. 73.°..........' 9020 3235
> C,H. Lewis.. Pat planer c.ore--- 9033 3236.
Leith V. Watkins, resumed. SNR WEGEE van ici kceas, eee. ee
ov
—_— =
— «
@
“William G. Maguire
Leith V. Watkins, resumed
David Friday, resumed
Ot W. Morton, resumed
Charles W. Smith
_ Edward L. Dunn ;
\ hasles H. Hinton, re anand
ag. 2 0. Burnham, resumed
Index, Volume VI.
‘Leith VV: Watkins, ‘resumed *
Report, P: MeDonald: Bidi lisan,
C.H. M. Burnham, resumed
- Leonard Spacek. ,
Letter, P. McDenald | Brfdison
Pipe Line Company; April &, 142
P. McDonald Biddison, resume!
Paul B. Coffman, resumed
P. McDonald Biddison, resumed
Leith V. Watkins, resumed
; Po MeDgnald Biddison, resumed
_ J.D. Creveling, resumgd
Samuel Joseph
Consulting Engineer,
to J. D. Creveling, Presicent, Panhandle Eastern Pipe
Line C ompany, November 24, 1
4}
to ~Raphand le
ON
3s
OSO0 .
QSOS
9928
Eastern .
Statement spe to Production from Husntos Fie ld
Le tter, ©.
April 9, 1
letter, ©.
April ll, aa
J. G. Shattuck
Exhibits:
1, Statement of: operating Results of Panhandle Eastern
Pipe Line Corapany and Michigan Gas
Company, 1938-#940"
Operating Results
Cost, and Cost Less Reserves,
Results as of Decémber 31,
Cost, and® Cost-Lese-Reseryes, of Plant
, 1939
Cost, and Coat Lesa Reserve A,
Results as of December 31
Restilts as of Decemb er 3l,
- Working Capital Pstimate, December 31,
o
of Plant
1938
194
)
of Piant
Transmission
Morton to Fede ral Power Commission,
Morton to Federal heees re ‘ommissio n,
99.
12
9977
10076
10399
104
52
10534 °
10559
10059
106
1O6US
10nd
10701 .
“10775
1077:
and -Operating
and Opersting
and Operating
1938 3040
_ Working ‘Capital Pstimate Approximate Payroll Basis,
December 31, 1940
e = . > > as > f
2, Determination of possible Revenue Rediction of Pan
handle Eastern Pipe Line
Transmission Company
Company and -Michigan Gas
: - 107
10777
10779
107
tan
7
70
elO7S2
53
3, Excerpts from Registration Stateme nt of Panhandle *...
Fastern Pipe, Line Company ‘filed with the Securities &
Exchange Commission, February 1 2.
to Gas Rese rvs ¢
’
\V
(937,
with
respect
~
. 10785
Original Print
9247. 3300
4320 3351
9349 3353
" 9364 3361 -
O76» 34117
9570. 3433
ai69 3478
Q7¥4 3533
3557
3616
3631 :
3676
2853 /
3S82
3919. :
3933 4
"3976 Ss re 2
3987 .
3980 °°
3000)
3991 - .
4012
sor
4013
4014
4015
4016
O17 Mt 3
4019
os
4, Excerpt from Registration Statement of Panhandle °
Eastern’ Pipe Line C ompany filed with the Securities &
Exthange Commission, November 13, 1940, with respect | 2
to Gas Reserves. ; re ey Fo ae 10786
. 5, Excerpts from Registration Statenient of Panhandle
"Eastern Pipe. Line Company filed with the Securities. &
Exe hange C ommission, November 13, 1940, with respect
to Design, Constructi#n ant Maintenance of Property _ 16789
6, Statement of Operating Expenses and "Taxes at 100°;
Load Factor Operation... tba Remnttis a aaeac.s ee
7, Statement as to necessary Price | per M.C. FP. at 100%
Load Factor. ms ies hake
_&, Statement of eitiinahe ad i ffect of 100°; » Load Factor on
earning Power of System...“ . 10795
4%, Statement of Factoraffecting the Nature and Magnitude ae
of réported Net Incomes. —. , ~ - 10796
Ve 10, Statement showing Effeet.of Variation in ac counting ert;
: Hy: ractices on Reported Incomes of an Enterprise... ...+ 10799
1, Chart shdwing Relation of Yield of United States ‘
Treasury Bonds and Notes ’.. 10800
12 , Statement showing United States Trea Bond Yields 10801
13, Chart showing History of Yiek Iv’ of United States :
Bonds, 1920-1939... 108065
14, Average Yiel lof U aited 8 ‘tates Teeneery Bond. _... 10807
14-A, Securities & Exchange Commission Releases Nos.
2775 and 2834 — Findings and Opinion of the Commissiow_
in the Matters of Panhandle Eastern Pipe Line C aes al re
etal A ST ee cen es . .« 10808
> a . Ae. .
oo : 4
| '
Index, Volume IX.
Order’ of Securities & Exchange Commission Denying
Applications in Part and granting Applications in Part, 10842
Supplemental Order of Securities & Exchange Commission
amending Findings and Opinion, 10844
17, Miscellaneous Data concerning Property ann Ope rations ;
of Panhandle Eastern Pipe Line Company. . * 10848
Schedule 1, PanharMle Eastern Pipe Line C ompany
< - Systern Compressor Stations nA -. 10848
Schedule 2, List of Comununities rece iving Servi ive direc tly .
. or indirectly from Panhandje C ompany ine luding “3
oi airs and Number of © ustomers_ as of June 30,
1941. - .... LOSAG
br hedule 3, List of tie lustrial (ustoguers receiving Ser-
Vice direct from Panhandle Company System, Juné
“;108,..... eka tap acer =
: Schedule ‘11, Panhandle itastere System Summary —
Miles of Pipe by, Sizes, June 30, 1941 . 10926
- 30, Testimony ‘of Rufus M. Smith....0.. 0.0 .. 9095s
Schedule 2, Latimated ( ’riginal Gas Content inthe Texas
Paphandle Field under Acreage constituting Reserves.
: Panhandle Easter mm Pipe: “Line Cc ompaty as of July
re]
1941 rkihccs SO
\-
wi eg Original Print >
* 4021
4025
‘4029
4030
A030
4031
4034
4035 °° -
4037
4045
4047
4047
4087
4089
4090 _
4090 —
4091
4099
4101
4103
4125
; Original Print
Schedule 3, Estimated Remaining Gas Content in the sot ‘
Texas Panhandle Fiell under Acreage constituting ~
Reserves of Panhandle Eastern Pipe Line Company as —
ee Mas eee , lO@R7 4125
Schedule 5, Comparison of Onn Flow Potentials i in Tekas
Panhandle Gas Field «2.0... -. 10990” 4129 .
- Schedule 6, Gas Acreage owned and unde or Gas Purchase
Contracts held by Panhandle E astern Pipe Line Come. |
pany as of June 30, 1941... 1lOvgt 431
“Schedule 7, Hugoton Productién to Argus Natural Gas ”
Company, Ine. by Panhandle Enste mm Pipe Line Com- ;
PANG, CORE... 04. 5 2 2; .. 10992 4133
Schedule 8, Te *xas Production to p anhandie Eastern Pipe. 7
Line Company... * 100934135"
; Schedule 9, Hugoton Production to Panhandle flastern
——* Pipe Line C ompany : , AOW9F = 4143
Se hedule 10, Hugoton Production to Panhandle Eastern ‘
Pipe Line Company... 11000) 4149
Schedule 11, Analysis of Cumulative Production to Main ;
-Line to and including Fiseal Month, of June 1941. 11003 4155
Schedale | 12, Coniparative State ment, of Production and
Purchases from each District for the two Years ended : ;
June 22, 1940 and June 22, 1941. "3 “11004. 4157
, Testimony of Glenn G. Bartle. NO 4159
Se hedule 3, Estimated Original Gas Content in the Huge
‘ton Field, (Kansas, Oklahoma and North Texas Pan-
handle), under Acreage constituting Reserves -of Pan.
handle Eastern Pipe Line Company as of July 1, 1! O4l- 1AORS * 4176.
Schedule 4, Estitnaéed yunmetered Gas from Panhandle
Eastern Fipe Line Company Wells in the Hugoton
. Field Kansas, connected to“ Argus Natural Gas Com
pany, Inc. as of July 1, 194] ; 11041 4181
- 37, Testimony and Extribits, Market Value of Leases of ;
‘Panhandle: Easvegy Pipe Line Co... -.. WONT. 4187
R. J. Wallace ideas ; .. 1104? | 4187
Summary of-Market Value of Losses seme 1104 4109
38, Basic Statistics used in calculating.Interest, ad valorem: . .” g
Taxes ahd, ‘ope rating mepense attributal le to unused’ ¥ ; 4
” Capacity... . : 12159 4203,
39, Reproduce tion Cost New of Plant, Property and Business *
of Panhandle EasternmPipe Line C gmpany and subsidiary "
Companies as of June 30, 1941 ° s 12152 = 4206 x
Letter P. McDonald -Biddison, « ‘onsulting: Engineer. r to--
= Panhandle East@rn Pipe Line © ompany;, August 29, 1941 12163 © 4206
Statement relating to Re production CostNew—June : *
ene ee fun bape 12154 4207.
Summary . 12165 4207
_2 . 3-A, Reproduction Cc as New of Plant, Property “and Busi- . ‘
ness of Panhandle Eastern Pipe Line Company and ee
=. <> subsidiary C ompanies as 6f Jpne 30, 1IM41 13130 4208 ‘3
_ “Letter P. McDonald Biddison, Consulting Engineer, to
"Panhars!le Edstern Pipe Line C ompany, August 20,1941 13130 4208
. .-
5 vit a ; . .
a
Statement relating to Reproduction Cost New —Juné 38,
Ua Pou oe us« Poa ete ne dea
Summary. .
40, Table showing estimated Main Line Sales, years 1941-
1946, inclusive... .. .
41, Graph showing Sales and Gas p lant by Ye ears, \ Pashandis
Eastern Pipe Line Company and Subsidiary Companies. .
- 42, Testimony of C.-H. Hinton relating te Future Capital
Expenditures and Operating Expenses in Production and,
Gathering System West and South of Liberal, Kansas...
43, Schedules presented in connection withthe written
Testimony of C. H. Hinton... ‘
Schedule 1, Additional Capital Expenditures required to
~ “produce and gather Basie Load, or Present Require-
ments _. nae 8 ae eatin «Obie nk ae ANA
Schedule,2, Additional € ‘apital E xpe nditures required to
produce and gather Anticipated Increased Load. .
Schedule 3, Estimate of Operation.and Maintenance Conte
-west of Liberal Panhandle Field — Basic. Load.
’ Schedule 4; Estimate of Operation and Maintenance
Costs — west of liberal Panhandie Field, — Estimated
i Ge sa ; .
Schedule 5, ProbeblAroduction from Panhandle East-
ern’s own Wells and Wells under Gas Contracts (Pan-
handle Field) during the Period July 1, 1940 to :, ee
ber 31, 1956.
47, Panhandle Eastern Pipe Line Company and Subsidiary
Companies, future Capital Requirements, Gas ‘Irans.
mission Facilities; biberal Station and Eastward
- 48, Statement show ing Balance Sheets per ‘Books Panhandle
astern Pipe Line Companyzand Subsidiary Companies,
as ateach December 31,1 hrough 1940 and as at June
30, 1941
49, income Statement Pegs tiyoks o Period from ig l,
1932 to December 31, 1
wD, “State ‘ment, showing beth Surplus per ake Patio’
from Commencement of Operations to June 30, 19415...
51, Statement showing Capital Surplus per Books, Period
— September 1, 1930 to June 30, 1941... ”.
2. Statement showing Investment in Gas Plant as at eoth
a scemnber 3], 1930 through 1940 and as at June 30, 1941
53, Statement of Dividends paid on ‘Class A and Ckiss B
Preferred Stocks from beginning to September 1, 1941
beginning te September 1, 1941..
55, Statement showing Comparison of Sales and Revenue,
Principal Industrial Customers, years 1939, }940 and 1941
' 55-A, Statement showing Comparison of SaleS and Revenue
Principal Industrial Customers, years'1939, 1940, and ‘4h
, 56, Statement of Gas Produced, Period from April, IVP to
* June 30, 19041. . -=
- 57, Statement of Gas Pure hased, Petiod from April 1, 1932 -
to June 30, aeak..
Vii
°
Original Print
18131 4200
_ 13133 * 42u9
13149 4211
13150 © 4213
“Sis” 4215
13193-4244
13104 4244
13195 4244
13196 “4245
13199 = 4251
13202 . 4257
e-.°
13206 4257
13207" 4259
13210. 4265
13212 4269
“13214 4273
13215 4275.
| 18217. .4279
' Ot, Stagement of Dividends paid on Common Stock from
; _ 13219 94280
13220-4281 .
1322) 4283
13222 4284:
13223. 4285
: og: Original Print
| 58, Statement of-Gas Revenue, Period from April t, 1932
* to June 30, 1941 and Schedule showing Detail of Sales’ to
various Types of Custome ore, 1939 and 1940- ; . 13224, 4287 -. .
Schedule 1, Statement of Gas Reve ‘nue, Period ffora April :
‘1, 1982. to June 30, 1941 ; 1$224° 4287
Re hedale 2, Detail of Sales to Gas U tilitie *s, Vears 1930 Oat ~
and 1910.0. P 13225: 4289° |e
Schedule 3, Detail of Sales to Industrial C ustomers, years ey
, 1939 and 1940... : 13227: 4203 : :
50, Statement of Gas Revenue by States, Period from Aprif? os uF <a
1, 1932 to December 31, 1941 ..., 32 47 He
(, Statement showing Sales Agreements with other Gas
( Cad as at June SO, 1941 13230 4209
Ol, Study of Current and Future Trends in C ‘ommodity Toe, F
Prices and Waues, by David Frriay 13238 4310 3
Graph showing Wholesale Prices from ISO) to faw "15239 4311 a f
‘Index Numbers of Wholessie Prices of Commodities by are
Groups........" -, 13241 4313
. Commodity Price Indexes of Te n ‘ountries . 1324704318
Statement relating te Tax Collections in the United
States, from 1913 to 1942 , 13258 4328
Index Numbers of Wholesale Prices of “all Commodities o7 ° -
by Months, from 7S¥0 fo 1940. f “13263 4333
Mtatethent relating to Wholésale Prices for W ee k ken ite Bh
September 20, 1941 ‘ 1324 + 4335 ;
Graph relating to. Average Weekly Harcings in Manu-
facturing Industries of New York: State from 1914 t% ie 3
oo 1941 : 13266 4339 0—~C—~—S
‘ * Graph relating to Average. Houtly Earnings: and Average paige
Actual Hours per Week per ‘Worker in twenty-five
Manufae ‘turing Industries from [914 to 1G4t | T3207 | 4341
(raph relating to Average Cost of Living. from fW35 ty .
1u3y a Rt ey LS208 4343 -
S42, Deduc tion from Cost of Repro: hae tion New ee Depreci-
ation and Present Value of Pl: ant, P rope rty ‘ad: Business ; ;
as of June 30, 1941 ¢ Sena ay L327 4445 _ i
Letter from P. McDonald Biddison,.C cavelting Pgineer, : a
ys to Panhandle Eastern Pipe fine © ompany, Septe ber -- * ae!
30, 1941 : rem et ae |
- General Simmary 4 ! $272 “7. ; _e
Rey 03, Investors’ Appraisal of ‘the Risk of C apitalin the Natural,
(as Industry as compare f with other Divisions tf the :
Plity Didustry, Sumunary of, Analyses, prepared by Paul 3
BK. Coffman, VieeP resi‘lent of’Standard and Poors Cor- .
poration : aa 13321 9 4349
si Table of C contents, ; . b3322° 4349 \ a
Statement of Eypenence and Qualifications of Paul B. ; arial tz
Coffman — 2 nf 13327 4354 \4
Javestors’ Appraisal of Capital Risks in Various Divisions \
of the Utility Industry. ~ 13348 “AB7EO —— _
Staterient A, Investors’ Appraisal of Risks S¥ Capital | ; ; \
for the years 1937, 1938, 1939 and 1940. ~ : 13351 4373 : a
“~- : | . :
° ion i ; ; 7 = ©
viii ; | ee Wisk
Bammer
ef
+
‘ -¢ ‘
Statement A-1, Investors’ Appraisal of Risks of Capital
for the Interim. Period of 1941, January-August, Both
Inclusive ........ oe
‘Statement B, ‘Imvestors’ ‘Apprainal of Risks of Capital :
Se for the years 1937, 1938, 1939 and 1940
Statement B-1, Investors’ Appraisal of Risks of Capit
for the nen — of 1941, January-August; Bot
Inclusive. . he
Statement C, Investors’ Appraisal of Risks of ¢ meee
for the years 1937, 1938, 1939 and 1940
Statement C-1, Investors’. Appraisal of Risks of Capital
for the Interim Pe riod of 1941, January-August, Both
Inclusive.
Statement D, Investors’ Appraisal of Risks of ¢ ‘apital
for the years 1937, 1938, 1939 and 1940
st@-ment D-1, Investors’ Appraisal of Risks of ¢ ‘apital -
for the Interim Period of 194) January. — Both
Inclusive... ’
Statement EF, ‘inv esters’ Appraisal of R ial if Cppital for
the years 1937, 1938, 1939 and 1940.
Statement E-1, Investors’ Appr: sisal of Risks at Capital
for the Interisi Period of 1941, January August, Beth
Inclusive
Statement F; General ladeniintion & overing each Com-
pany as to the Nutyre and Bise of the Business ancl the
Territory served: .
(4, Statistics supporting Data, Exhibit 63, Appeindixes A,
B, and C. :
“Appendix “A, Complete List of Companies studied and
Reasons for eliminating those not used to-determine
Investors’ Appraisal of Risks of ¢ ‘apital’
Appendix B, Securities of forty-three Natural Gas Com-
panies considered Représentative of the industry, ete
are Index, Volume X.
- Appendix C, Working Papers showing the Computation
, of Inivestors’ Appraisal of the Risks of Capital
Water © ompanies. 7... - hee Vs
klectriec Operating Utility Companies
Manufactured and Mixed Gas Conipanies
Natural Gas Companies... > rae
65, Study re lative to Rate of Returmon Panhandle hestern
* Pape Line Company peepared by- Paul B. Coffman, Vice.
‘President, Standard and Poors Corporation.
Table of Content? :
_ Chart No. 1, Main Transmission System of Panhandle
* Eastern Pipe Lihe Co. and Subsidiary. .
Chart No. 2, Growth of Natural Gas Industry in | ‘hited
States of America from 1906%to 1940.
Chart N& 3, Consumption of Nafural Gas-in United
States of America from 1919 te 1940 — ae.
Chart No. 4, Revemie from Natural Gas Consymed in
_ United Statesof America from 1919 to 1940
m A >
-
.
Original Print
13352 4375 -
13353 4377
- 13354. 4379
13355 4381
13356. 4383
13357 4885"
13358 4387
13359 «4889. °
13350 4391
«
13351 4393
13379-4414,
9
. 13380-4414
~A3387 | 4426,
13420) 4461
. 13465 4501
13495 4521
13533. 4547
13584 4547
13542 4559
2
13548. ,4567
ei
13556 4571
13552 4573
-~
"43398 Pe
"13399 4447 -
o
Chart No. 5, Average Revenue, per M.C.F. froni 1929 to
eee ss wae rates Rae ore ke eee ve
Chart No. 6, ‘Paskindle Sales by States, vs. “eid
Consumption of Natural Gas from 1934 to 1940..
-Chart No. 7, Trends of Grogs Revenue from 1934,to , 1940,
Original Print
_ 13556-4577
ms
thn
Panbandle vs. other Pipe Line Companies-and Industry 48558 4579 ~
Chart No. 8, Operuting Ratio of Panhandle Compgréd
with other Pipe Lme Companies frém 1934 to 194
Chart No. 9; Trend of Revenue and Expenses of Panhandle
' Eastérn Pipe Line Company from 1934 to 1940.
Chart No. 10, Percent Earned ‘on ‘Invested Capital of
Panhandle Basedsipon Capital Structure. .
"Chart No; 11, Percent Earted on Invested Cgpital o'
‘Panhandle Based‘upon Net ——" Intangibles and
Working Capital. Ji é
Chart No. 12, Re tarn to & ommon Stoc khollers of Pan-
F handle Eastern Pipe Line Company from 1934 to 1940...
CharteNo. 13, New Tax Bill will reduce Income sharply
Computations Based on € )perations — Twe lv e Months ”
ended June 30, 1941, ......00 eee ; 13570 - 4591
rune No. 14, Percent Earned on "Invested ,Capital a
Panhandle Eastern Pipe a — as of June ; ae
- 30, Eo ere ° 13572-4593
* Chart No. 15> Percent Earned on Invested | Capital of =
Panhandle Eastern Pipe Line © ompany -— as of June ne
30,1041... 13574 4595
( ewe No. 16, Historical re atte a Debt: © apital” of Pan-
. handle Eastern Pipe Line Company. —from 1930 to 1941
Chart No. 17; Effect of 1941 Refinancing of Panhahdle
Eastern Pipe Line Company...... -
Chart\No. 18, Historieal Coats of Preferred Stor k Capital
of Panhandle Eastern Pipe Line C ongpariy from 1937 to
Nes sates ites
Chart No. (9, Earaings — Price Ratios of Natural Gas
Prpe Line Sommon Stacks from 1937 to i940. :
Chart No. 20, Qurre nt Earnings — Price Ratios of Natural
Utes Pipe Line Gommon Stocks.. Re
Cc hart No. 21, Cost of ‘Financi ing Nortjiern Natural Ges
Company Bars Stoc k -- Offered to Public on
September 10, 1941... Oe, SY
‘Chart No. 22, Estimated erent Cc = a Finaaci ing C om-
mon Stock of Panhandde\yBastern Pipe Line Company
Chart. No. 23, Continuing Grow th of Panhandle System
Indicates Future Needs for New Cc apital.. nes *
- Chart No. 24, Panhandle Sasi Pipe a Cothpany -
vested Capital as of June 30, 1M. =e eee ee
-* Chart No. 25, Preferred Stock “Cougual inyNatural Gas
Pipe Line C ‘ompanies ere rereree? Cree Se ps Oe
Chart No. 26, Earnings Neceseary 1S Maintain Credit
Wosition of Panhandle Eastern Pipe I Company...
(tart No. 27, Earnings Necessary to Maintain Credit
Position of Panhandle Eastern Pipe Line Company ..
‘Chart No. 28, Overail Cost of Capital to Panhandle East-
ern Based on Ideal Capital Structure... eae hae
ree
13560 * 4581
- 135p2 _ 4583
13504 4585
es: +
“
13566 4587
13568 4589
©
13576 4599
13578 . 4603
13580 4605
13582 4607
1BAS4 4609
_. 13584’ 4613
13588 4618
13500 4617
13592. 46z1 °°"
13504 4623
13506 " 4625-”
ee
13508 ., 4627
13600 4829
Ree
e
/
fs
i
for Operations and Mairtenance..
SG
Chart No.. 29, Dollars needed Annually by, Panhandle
‘Chart No. 30,, Dollars — Annually by Pablianule
OE ME ones coos eae ee et
° c hart No. 31, Dollars aiaiiad Aintuaily by Panhandle
to return Capital to Investors when Gas Rese ves ane
Exhausted. .
Chart Now32, Dollars wiaded “Annually by Piskeadhs
for current Capital Réquireéments — Bonds .
hart No, 33, Dollars needed Annually by ‘Panhandle ot
for current Capital Requirements — Preferred Stock :.
Chart No. ‘f: Dollars needed Annually by Panhandie .
Capital Requirements ~- Common Stock .
° for curre
Chart: No. 35, Dollars needed Annually by Panhandle -
_ for total current Capital Requirements — Total -In-—-
‘vested Capital......... Peer ree epee tor ae
Chart No. 36, Dollars’ needed Annnally ‘a Panhandle .
to provide Service-to Customers, a Fair Return to In-
.vestors and restore Invested Capital wher Gas me
serves are Exhausted
Chart No, 37, Dotlays needed Annually by ahead
to Provide Service to,C ustomers, a Fair Return to In-
vestors and restore Invested ( ‘apital ‘when Cias Re-
‘serves are Exhausted‘ 7 +
Table for Chart No. 2, Growth of Natural ‘Gaa ‘ih the .
United States of Ame rica for the years 1906 to 1940,
‘Inclusive. .
Table for Chart No. 3, Consumption of Natural Gas’ in |
the U nited States of America for the Years 1919 to 1940,
Inclusive. .
- "Fable for Chart No. 4, Rev enue from Natural Cee Ce on-
sumed in the United States of America for the years
1919 to 1940, Inclusive.
Table for Chart No. 5, Sines Revenue pet M. C. F.
from Natural -Gas Consurmned ir United renee of
Amerign 4 at Points ef. Consumption. .
Table for Chart cp —— Gas Sales us States for -
" handle Eastern Pipe Line Company vs. “Other Pipe
Liné Companies and the Natural Gas Industry,
to 1940 Both Inclusive .
Table for Chart No. 8, Operating Ratio. of ahead
Eastern Pipe Line Company compared: with other Pipe
_ — Line Companies exclusive of Taxes, 1934 to 1940...
* Table’ for Chart No. 9, Panhandle Eastern Pipe Lite:
Company, Trend of Ravenna and Expensés.......
Table.for Chart ‘No. 10, Persent Earned on’ Invested
Capital, based upon Capital Structure
_ Table for Chart No. 11, Percent Earned of Invested
- Capital, based’ upon Net er —_ow and
Working Capital........
Table for- Chart No. 12, hehare torC onunen iad kholders
1934 to 1940 Both Inclusive. ........ oh ere
er
Original Print,
13602 4633
“ae 13604 . 4637
13606 4639
-.... 13608: 4641
13610 4643
13612 4645"
ye 13614 4647
Diss 13616 4649
fp 13818. 4351
13619 4653
13620 4655
_ 13621 4657
- 136224659
.... 13623 4661
, Pan-
1934
13624 ° 4663
oe: 13627 4669
es 13628 4671
13620 4673
Hie 13630 4675
3° s .
ee Sa _ Original Print
it, toe. Table for Chart No. 13, Consolidated Statement of Profit :
Ba and Loss for the twelve montlis ended June-30, 1941 13631 4677
‘ Table for Chart No 1@ Percent karned én Invested’ , ;
: Capital — twelve months ended June 30, 1941 13932 4679
Table for Chart No. 15, Percent. Earned on Iifvested ~ .
c apital i in the twelve- months ended dane: 30, 1941 13633 4681
Table for Chart No. 16, C “otuputation “ol Weight ted
Average Cost Ratio of all- “Bond Issues 1930) -—— June
30, ral Oe eg ee ice -.. 13634 - 4683 |
Table for Chart No. 17, Projec tion am Average Interest :
Cost, ‘Debt Retire ment and Amounts to be outstanding F
of Debt issued in the 1941 Re ‘financing... ; _ 13639 4593
Table’ for C hart No. 18, Preferred Stock. . « - , 130 4695
Table for Chart No. 19, Earnings — Price Ratios on :
Natural Gas bine Line, ee Stor ks from 1937 to.
Sten ..ve,. 13681 - 4007 *
Table for C hart No. 20, c urrent E ‘arnitivs — Prive Ratios aly 4
on Natural Gas Pipe Line Common Stoc fe oa {3042-4699 -
Tabte for Chart No. 21, Data regafding Public Offering .
of 355,250 Shares Northern Naturil Gas Company ‘3
Common Stock... 0042. * <o.. ce. 19AB. | 4701 ©
Table for Chart No.*23, Statistics of Growth from 1936 :
to.1940....2 13644 4703
Tab le for ¢ ‘hart Xo. 25, Ratio of Pre ferred Stock to tital
a ‘apitalization i in Natural Gas Pipe mis Companies as :
of Datember 31, 1940. ‘ 13045 4705
‘Table for Chart No. 26, Earnings Misia to o Maintain oi
Credit Position based on Invested Capital as of Junte ;
6 <A tek ha acesce: 13646 4707
Table for Chart No: 27, Earnings Necessary to Melabein :
Credit Position, ete... . 13647 4709...
“. Table fof Charts Nos. 29 to 36, Loclusive, Dollars needed :
Annually to provide Service to Customers, a. Fair
Return to Investprs and Return of Invested Capital ;
‘when Reserves are Exhausted [| - 13648 4711
Table for Chart No. 37, Dolkits uoeded“Anmaaliy to pro >
vide Service to‘Customers, a Fair Return to Investors’ *
and Return, of Lrivested ¢ ‘apital when Reserves are
_ Exhausted ...... 13649 4713
49, Statement showing Atnount d pial on Book .
Cost of Property as of June 30, 1941 13708 4715.
70, Reproduction Cost New of Plant, Property and Business *
as of June 30, 1941 | Determined from Valuation of Septem, ;
ber 30, 1938 ‘by addievon of Neg_ Property hak litions, plus P
Items of Working Capital, Value of GAs Purchase Con- ,
tracts and Cost of Business Deve k pme nt from Valuation
of June 30, 1941), STL 4719
71, Valuation of Property; Plant “an Equipment, Supte smibe aes,
6. A. epi ent: “13712 4719
Lettey from.P. Me Donald Biddison, Consulting Exgineer, a
_.to Panhandle Eastern Pipe Line c OTAPARY 5 October 14, , : ,
_ ery . "13713 4719
. . .
Qo . : . e* ° °
R
» . * ff
Pe re x yy Original Print
Statement rélatingyo Appraisal of Pygperty of Panhandle ee
Eastera Pipe Line Company a September 30,1938 14719 1721
72, Statement of Net Additj o Gas Plant per Books ear’
from October 1, 1938 to Juge?30, 1941s. 7 14178 4723
74, Working,Capital..... . : ‘+. WSIOS 4724
- Table I, Total Additional Necessary Materials and Sep. fe
plies by Departments . 14198 4724
“Table I, Additional Necesssary Materials. and Supplies
by: Degirtmente, Classified to show the Aggregate © >
" Supplies. Tees . 14190 4724
8 Table Uf, ” Summary of Misimum Rensvanhde Asnounte
of Working Capital Currently Needed... 1420000 4725
Table IV, Total Cash, Prepaymenta, and: Ms aterials and ar
Supplies Actually Matntairg| by the C omparty at Cer- :
. tain Dates inthe Past _.- 14201 4725
5, Natural Gas Supply, Value of Gas Bean eves and Wells, °° Sea
” one 1, 1937 “ « 14202 ° 4726
. Letter Ralph J Davis, Inc, Engineees, to y wees ;
. Rastern Pipe Line C ompany and othe rs; February 10,
ee oe “14203 4726
Table No. 2, Valuation of Produci ing 5 and Proven Leases ;
in Producing Area ‘of Amarillo, Field ae 14227) 4744
Table Ne. 3, Valuation of Producing and Proven Leases .
in Producing Area of 4lugoton Field 14228 4745
- Table No. 8, Classific ation of "Meta Under Lease, .
February 1, 1937 ae: ; ; M235 4745
» Panhandle ‘Kastern Pipe: ‘Line e gmpany Natural Gas” He
gers “FF 11243 . 4g
Letter, Ralph bE. Davis, Inc., Enazinee ry, | to ‘Bosrd of :
- + Directors of Panhandle Sante rh Rane Line Compatiy, ade
November 12, 19)... °. +. a" 14244. 4746.
Summary of Acreage tn Amartllo and lastin Fiei ie 14248" 4731
77, Description of Physic is ed rty of Mich tigan Gas: ‘Frans. . Es
* mission Corpofatior | Nie Sealine aM 1425 ATSB
5 Testimony of fieorge S. Young. . BPs italy BT ae NS ona * 4753
" Schedule 1, Compressot Stations ; ai: 14272 4770
Schedule 2, List-of C onfimunities receiving Ne rvice from .
° * Publie Utilities to whom Mic ‘higan Gas Transmission
Corporation sells Gas -Purchased from Panhandle Se
° : Rastern Pipe Line Company, Population and Number" c,
of Customers as of June 30; 1911.° c ‘142744771
Schedule 3, List of Industrial Constmers teceiving Service
on an Interruptible Basis indirectly from Michigan
Gas Transmission Corporation System, June 30, 194) 14277 °
Schedule 8, Michigan Gas Transmission C Orporation Sum-
Pt
ary of Miles of Pipe by Sizes, June 30, 19415. 14295,
> . 7%, Comparison a Daily provided Capacity to de! liver
Firm Gas with Maximum Daily Délivery of Firm Gas
:
from System of Michigan-Gas Transmission Corporation. L4i3il -
79-A, Comparison of Daily provated Capacity to, Deliver. .
Firm Gee with Maximutn Daily “Delive?y of Firm ¢ 748
B) _ find total delivery of Gas from. the Pipe Lines owned or
operated by Michigan Gas Trapstuission Corporation for .,
: PF fs the Winter Period of on. 1942 ito’ ee 27,1942..°.. 14312
a |
2
4785 -
*
’ rn : P
‘ 79-B, Total Delivery of Gas from Pipe Lines owned and
operated by Michigan Gas. Transmission Corporation on
Days on which the De ‘livery of Firm Gas from System
was the Maximum
SO, Report of Inspection of Equipment in the. ‘Compressor.
Stations of the Michigan Gas Transmission C orperation
as H.C. Lehn... Sores >
, Deprec iatTon Study, Mic ices Gas Transmission C or-
tw on hy gt NN F085 6 ease tuo koawan'e
Letter, H. ie ac ias Engineering De partment, to
GS. nee, Vice President, of ‘Michigan Gas Trans-
/ mission-Corporation, November" 10, 1941
Summary of Inspection Data... “
w2, Aécrued Depreciation on C OMpressor Station Structure,
’ measuring and regulating Station Structures anel Equip-
ment and other Transraission Structures and general,
Equipnient as of June 30, 1941 by Francis 8. Haberly
53, Reprodiction Cost new of Plant and Property of Mi¢hi-
* gan Gas Transmission Corporation ss of dune 30, 1941
by Francie 8. Haborly...<s....0 520600005. te.
Letter Francis &. Habérly, Engineer, to G. S. Young;
‘» ° Vice President, Michigan Gas baer ame ec Cc orpora-
tion, October 27, 1941
Table of Contents. oar
Statement of Francis 3S. Halic “
Summary
“Reesdneiliation of Original Cost t and of Reproduction Cost .
‘to. reflect Changes dae to Reclassification. ,
Compressor Station Struc at and Heaproye ments...
‘All Stations ein nek s .
Montezuma C ompressor Station,
Zionsville Compressor Station
carey:
: E ‘dgetton C omupressor Station ; ae ea
“Other T ransmission System Sttic tures and 1 Lmpres vements
All Lotations :
Montezuma C ompressor ‘Station,
Ziongville Compressor Staticn.
Edgerton Compressor Station
Meins
Compressor Station Equipment
All Stations
.* Montezuma Compressor Station
Zionsville Compressor Station.
Edgerton Compressor Station
~ ¢ Measuring and Regulating Station E aquipme nt
General Equipment...
Office Furniture and Fixtures. ...
Transportation Equipment _
Stores Equipment :
- Tools and Work Equipment. .
S4, Reproduction Cost new less er iow of Michigan
Cias Transmission Corporation &3 -of » 30, 1941 by
Francis.S. Haberly. ;
,
~ es V oe.
ve
Original Print Cs
14413 soe me
14314 4789.
14421. 4794 : om
14322 4794
14323 “4795
14369 47060 a
14375 4801
14377. 4801- é
14378 4802
14379. 4802 *
14389 - 4810"
44390! 4814
14391 4813
14201 - 4813
14392 4813
14398 4818 2 i
14402 4821.°-——"-
14405 4871 ; ?
“14 Same he
10654824 |
‘14407-4825,
L408 “4826-
140% 4826 os
14416 4831 a
14416 4831 - a
14417 4831 a
M27 64890" CC
14433 + 4844 —
14427 9-447, ;
14438 4848 Pets 5
144390 4hgn GO° r.
i44ey. GS40 4
14441 4840) ‘
14442 49
; : a 4
1443 4850
c
ae.
cs ae ant tn.
Xe
: ¢ i‘ Original Print
Summary... 14444 4850
Compressor Station Strne tures and Sanmeecied niente 14445-4851 .°
Measuring and Regulating St: ition Structures. gees wh 46 4852
Other Transmission System Struc tures. 14447-4852
9 ; : ; :
Index, ‘Volenie XI soli
Mains... : ; . M4448 4853 \
Cc ompressor Station bE quipment : 14449 4853 Bic
_ Measuring and Regulating Station bE quipment 14450 4854 :
“. General Equipment... 1451 4855
87, Materials and Supplies . Restatement of ¢ ‘ost of Major i :
Items as of June 30, 1941, Michigan Gas Transmiasion
Corporation by. Francis 8. Haberly 144660 4856
“Materials and Supplies 7 14467 4856
8S, Michigan Gas “Transmission. Corporation — Compara. * 25
tive: Balance Sheets, per Books as at December 31, 1996 \
. to 1946, Inclusive, and June 30, 1941. ; 14475 © ga63
&9, Michigan Gas Transmission Corporation Statement ry
.- - showing earned Surplus per Books for the Ten Months _
¢ ended Deérember’ 31. 1936, years 1937 to 1940, inclusive, ‘
i ‘year and six months ended June 30, 1941. .: 14477-4867
90, Michigan ‘Gas Transmission’ Corporation —~ Statement
showing Capital Surplus, per bods, for the Ten Months. .
ended December 31, 1936, years 1937 ft6 1940, inclusive, '
year and six months ended June 30, 1941 14475 9 4869
OH, Michigan Gas Transmission Corporation — Preliminary
‘Report on Original Cost Sturies by € ‘entra! Service Cor- >
poration. .«.... “ ol. 1467 471 :
: Statement A, Outline of ( Drigin ae: De ‘ve bigeiie nt 14489 4878
Statement Atl, Comunon- Stock issued and Outstsucding
at January 1, 1940 4nd June 30, i941. 14402 ° 488}
‘Statement B, Statement showing Ac “quisition by Keport-
‘ing Company or Pre: fecessors : af Gas Ope rating Unit o‘+ | '
or System, ete. 14493 4883 :
Statement ‘D, Statement relating to Cag . Plant as of ‘ . :
= ae January Il, 1940, ete. = “14494 4885
nae Statement Ey Statement showing Seteenaty of “Adj: ist- “> -
“ment relating to-Gas Plant, ete. 14495 . 4886
Statement F&Statement ee to%Gas Plant «4 of
January 1, 1940, ete. 14491 4887
Statement , Statement relating to Balance Sheet an i *, .
January 1, 1940, ete. 050, mee 14498 48918
~.* Statement H,; Statement relating to Suggeate od 2 lan for 3
. Peisbaliok | Se 14499. 4893
Statement. [, Statistical “Information Relative: to Gas —— me
Plant at June 30, 1941... 14300 4893
92, Michigan Gas Transmission “Corporation Statefhent -
' showing Original Cost Depréciated to present Conditions.
as at June 30, 1941 and obse ‘rved Depreciation’as at June.
" 14507 4908
93, Mich
of Contributions made
opment for the years 1936,
May 31, 1938 . wii
4, Michigan Gas Transmissian
_ Showing working Capi
05, Michigan Gas Transmission Corporation
Cost of Completing work in Progress at June
‘Estimated Gross Income tot
pleted Projects ;
e
wan Gas Transmission Corporation ~ Statement
te Customers for Business Devel-.
1957 and. five months ended’
~
Corporation Statement
tal as of June 30, 104)
- Estimates!
30,1941 ane
e derived from the Com.
- . . . Pe » % ree . . “es.
. 97, Michigan Gas Transmission Corporation — Variation
9, Michigan Gas Transteission Corporation
of Income and Expense per book
ber 31, 1936 te 1940,4ne1
30, 1941 ard six Maf
AL, TO”
1, Michigan G
of Income and Expense per hooke and
Dollar spent for Main Compressor Units
Graph relating to Variation-in Pure
Dollar spent for Steel Pipe
; ‘Gtaph relating to Variation in Purchas
Doiler spent for ‘Station Structure Ma
Graph relating to Variation in Purchasing Power of the
Dollar spent for Station’ Steucture. Labor
in Purchase Power of Dollar as Related to Gas Plant
Graph relating to Variation in Purchasing: Power of the -
ing Power of the
terials
Graph relating to Variation in Purchasing Power of the.
Dollar spent for Station Equipment Labor-
Graph relating to \
Dollar spent
“Statement relating to \V
for Mains Instadlations
the Dollar as related to “Gas Piant:’
Period per books on an emonual basis,
us Transmission Gorporazion
and redistributions necessary te ref
for six months ended
December 31, 1940 and June
“pany, Line Losses and
Dex emiber 31 P
endel dune 30, 1941 ’
10l, Michigan Cas Transmission Corporation
tive Statement of Operating |
December 31, 1936 te Layo,
ended June 30, 194] and si
and Decenber 31, 1940 ;
102. Michigan as ‘Trangmission Corporation
and Maintenance bx
“months ended June 30, 1941
- 103, Michigan
showing Gas Sales, Gas Tratispofte:s,
Cas Purchased for the years ended
‘ariation in Purchasing Power of the
’ Py . ‘ ‘ . wae
aration in Purchasing Power of
Statement
8 for vents eftded Deverit-
usive, twelve Mont tes ended June
iths ended June 30, 941 and I Jecemnber
7:
Stazement
1 after Adjustments
e(f the 2°46 months
aU, 141 anid fortwelve months
Compara.
teVenues, for vears ended
inclusive, twelve tiontiis
na
‘as Transmission Corporation
months ended June 30, 104)
Operation
pense per books for the: twelve
ptatement
1936 to 1940, inclusive, twelve montis
ended June 30, 1941 and Dy cember 31, 1940
106, Registratian Statement of Panhandle J
hing Cotnpany No. 2.4507.
Exchange Commission November 18,
from.
filed with the
“astern Pipe
Securities &
140, Excerpts
Original Print
Hasing..Power of the,
, . :
LISOS = 4905
L510 4908
M4517 4919
14519 4921
(4522 4923
14523 4925
14524 4997)
14525 4920
1452 > 4934
14527) 4933
S28 4935
14530 4937
14533 4943
14537
“4951
14588-4943
f As used by { ‘om-,:
1454) | 4957
.
14548 4959
“et
. f . , - * Original Print-
Cover and Pages: 1 to 4. ; _ 14548 4959
~ Pages 45 and 46... ; ry. . PRES 41969
¢ Pages @and 61... - a : ~. 14608 * 4973
Page 8-1, Auditor's Certificate >. es "14626 4977
Pages 8-3 to S-7, Balance Sheet as of D&eember 34 , 1940. 14628 4979"
Pages 8-17 to 8-24, Intangible Assets, ete. ~... 14642 4989
- 107, Report A-LIASS8 of ‘the Committee on Stock List, New ;
: York Stock Exchange, application for I. isting of the first
. Mortgae and First Lien 3°) Bonds, Series B due-Noven» |
aoa "ber 1, 1940 of Panhatidle Eastern Pi ipe Line Company... 14651 5005
ot Seer - 0 $4657 * 5005
‘ 108, Letter of BP. Me Donald Bick eos : re Provision las Re
tireme nts, Depletion and Amortization for year 1938. 14732-5008
100, Letter of P. McDéaatd Biddisonre Provision for Re. 7”
tirements, Depletion.and Amortization for year 1939 14733 5007 —
“110, Letter of P, MeDonald Biddison re Provision fer Re- :
tirements, Depletion an! Anirtization fortyear 1940 14734 5008
o 1, Letter of P. MeDonald Bidiisen re Provision for Re-
. tireéments Depletion-and Amgpvation for year 1941. | 14735 ~ 5000
112, Table of Subsidiary ¢ wpe Panhandle Eastern .
Pipe Line Company’ 14736 ©6010
; 131, Future Division of Prodi tion; | et wee n Fie “Tis C on- ‘
side ring & reasonable ‘e xpected Load Increase Hazes ° 5015 -
$2, Future Division of Production between Kelds without 7 :
. Conside ration for increase’| Loads. - PA 1476 ONT
‘ 137, Ac res dseg in Determining We iuhted: Average Pressures. SS
of Texas Panhandle Field ~ |is3 SOS
138, Dry Gas Prov duction and Pressure Decline Texas aes
Panhandle Field ; 14784 SOO
* 139,. Estignated Intake Pressures at Sneed) Compressor *
Station. ..”. Ss 14785. S020
140, Fatimated Average Workine* Pressures at Well head
for “Group Areas” shown on Exbibit 46: 147586) O21
141, Annus] and Cumulative Production from Panhandle
Field, Texas"... et 2y LAIST 5028
142) Summary of Cost of Gas Produced and Pure hased —- ;
basic Load for the years 1940-46, inclusive . LA7S89. = 503% -
‘Schedule 1, Summary of Cost of Gas Produced and Pur-
chased per M (C.F. by Fields ssa Load for the
years 1940 to 194 inclusive - ! 17) 5027
Schedule 2, Cost of Gas Purchased per Mo C.F. By
’ Fields - Basie Load for the vears TOW te gor in. Sion
elusive..." eat ges Seren .-~ 14791 5027
' Schedule 3, Production fosts per M. C.F. Producedby
Fields — Basie Loa the veark 1946 to 1946 in
clusive. #& : hay “..... 947902 8031"
Schgdule 4, Transpértation sta ps per rM.C. F: Produced ©
by Fields -- Basic Load for the vears’ 1940 to 1946 in-
elusive eS - 14793. $033 :
Schedule $; Summary of Produetion. an: r Transportation
Costs per MC. FY Produced by Fiek ls ~--Basie Load
for the years i940 to (~ lusive.... piadek Cass 5035,
, rr f e ae . a 7 ; ae
XV
o
143, Summary of Cost of Gas Produced and Purchased —
‘Estimated Future Load for'the vears 1940 to 1946, in-
clusive:...:.: ce See eae
Schedule 1, Summary of ¢ cont'd Gas Produced pet M.C.F.
by Fielkts —- Estimated future Load for the years 1940
to 1946 inclusive. . Fe
~ Schedule 2, Cost. of Cas Purchased per M. C.F. by.
Fields — Estimated Future Load for the years 1940 to”
1946 inchisive
Schedule 3, Production Costs per M. C F. _ Produced by ,
Fiek is — Estimated Future Load for the years 1940 to
1946 inclusive. ” aoe eee
Schedule 4, Transportation c osts per M. C: F Prodgced
‘by Fields — Estimated Future Load for the years 1940
to 1946 inclusive... \
Schedule 5, Sur umary of Production ont Trangportation
Costs per M. C. F. Produced by. Fields — Estimated
Future Load forthe years 1940 to 1946 inclusive... ...
145, Panhandle Eastern Pipe Line Company — Compiled
tegistration Statement No. 3-4919 filed with the Secur-
ities & Exch ange Cc aaa Bec ember. 24, 1941, Ex-
- cerpts fron ,
‘ Cover and following Page
“Pages 2 to me ee none eine
Pages @ to 20. -
‘Page S-1, Auditor's ¢ ‘ertifica ate
Pages 8-3 to 8-9, Bals anve Sheet as of September 30, 1941
Pages 8-18 to 8-21, Reserves for Deprec iation, ete.
147, Hok ling Company. Act Release No. 3288, January 23, °
1942 — Fin: lings and Opinion ef the Securities & E xchange™
x —— ission in the Matter *f Colambia Gas and Elec-
tric Corporation, et al
Order
149, Statement showing lavectment by Owners and Long
Tetm Creditors at June 30, 1941, Panhandle Eastern Pipe
Line Company
1M), Financial Data of C ommon Stock Tssues f Fleetric
Boge Gage Utilities, Ye: ars 1935 to 1940, inchisive
. harrungs — Price Ratios of Common Stocks in Various
” Divisione of the Utility Industry ..
152, Estimate of Federal’Income and Excess Profits Taxes,
applying Rates. levied in the Revenue Act.of 1941 to Net
elcome’ for the. Year ended June 36, 1941, Panhandle
‘Pastern Pipe Line Company
+ te
53, Statergent of Cost of Business. ‘Development Period’
froin April 1, 1932 to June 30, 1 , Panhandle Eastern,
Pipe Line Company
157-A, Agreement between Panha ile Eastern Pipe Line:
Company and Columbia Gas and ‘Electric Corporation
“and Columbia OU and Gasoline 3 nae dated Jan- .
Mary 31,1986 (Exhibit H-6: F
57-8, Agreement between Columbia Oil an 4. Gasoline Com
pbc irs and Columbia Gas and Electric Corporation and
6 =
re oe
ite
a nd
Origina) Print
14795, 5036
14796-5037
14797 5030»
_ 14798. 5041
14799 5043”
14800" 5045
14824 SOIT -
_. 14824 8047
44827-5051 *
14834 5059
14924 5083
14926 - 5085
14941 5090 °
15001 S17.
15114 5140
15117 - 5143
“15118 5145
15122 5153
15131° 5171
15135. 5177
15227, §183.
Panhandle Eastern Pipe Line Company and Henry T.
Bush and C.: Ray Phillips, receivers of Missouri-Kansas
Pipe Line Company, dated as of June 1, 1936 (F ixhibit H- 9)
Exhibit A, General Release
IE xhibit By General Release to Leveivers
Exhibit C, Release of Claim “e
157-C, Bound Volume containing Offer dated etuaty 31,
1936 of Columbia Gas & Hleetric Corporation and Colhttit-
bia Oil and’ Gasoline Corporation to the Receivers of
_ Missouri- Kansas Pipe Line Company, Exténsion dated
" Mareh 5, 1936, Modification dated April 22, 2 HOR and
Acceptance dated April 29, 1936 (Exhibit 1-2
Letters.
15S8,- Statement: diniiied Gas Raveie frets Indiasia Gas
Transmission Co rporation and Michigan Gis Tranamis-
> sich Corporation from November 1931 to November 1941,
inclusive, Panhandle Easte rm Pipe Line Company .«
10, Purchase Agreement dated February 2, 1942 Cooker :
Panhandle Eastern Pipe Line Company ‘and Glore,
Forgan & Company and hidder, Peabody & Company
Index, Volume XII. *
161, Estimated Main Line Sales and Revenues,-vears 1941-
146, inclusive, Panhantile Eastern Pipe Line C ompany |
162, Ten Years’ -Estintate (1941-1951) of Sales to Detroit
"and other Areas and Types-of Sale.
163, Finane ‘ial St atement of Mie higan Cias ‘Vranaaiesion
Cc orporation for Period ended December 31, }941.*
Balance Sheet as of Déecember 31, 1041. .
Assets -
Liabilities
Income Statement
(ras... pM a we oe
Non Utility
Other Income
Other Deductipns. .
Surp)us Le Areata ie
fias Expenses... :
Statistical Report .
Fixed Capital Expenditure, Report
. 164, Suppleme ntary Statement of Financ inl Statement,
Exhibie 163.
165, Operating Budget of Micl ‘igan Gas Transmission Cor-
poration for the year r 1M42, Excerpt from... <..
Cover......+ , 4 ee Seg Ree
Pages 3 to 53... ee tes ;
emt Statement. ee mp es eh GS EIR Te Silos
s Cahir Deductions. . ‘ - yee
166, Statements showing Gas pe *re hase and Sales Transac-
" ‘tions bet ween Panhandle Eastern Pipe Line Company and
Subsidiaries. tara oan aaueenaes
15237 5183
15251 5200
5254 5202
15256 =§208
15258 5205
152) = 220
15300
15301
15312
15313
_ 15814
15315
[5317
15318
15320
15321
15322
. 15323
15335
15339
15343,
15353"
15356
.. 15355
_ 15357
15357
15358 7
15359
15373
- §273
§295 -
5297 -
52909
5301.
6305
5397
531L
5313.
5315
5317
5341
5349
5357
| -§377
5381
5381
. 5413
Original Print
ser Statement, sacle Chee ie « a Mic hina » Consolidated
Gas-Company in favor of Michigarf Gas ‘Transmission
Corporation drawn on National Bank ‘of Detroit” 15874 BAS
169, Statement showing Percentage Increase or Decre ase: . ;
of Sales of-Natural Gas of Michigan Gas Transtuission ‘
Corporation for year 1937°to 1@41, inclusive, to other
affiliates. .. 153376 «BAI?
170, Certificate setting fortl: the Desrgnation ant certain
of the Terms of the 5.40%, cumilative Preferred Stock i
of Panhandle Eastern Pipe Line C ompany filed Februaty :
3, 1942, in Delaware a : L378 2h
171, Certifie ate of Purchase and Retirement ol ci lass A
Preferred Stock of Panhandly Eastern Pipe Line Cori
pany filed February 14, 1942 in Delaware 15303" 5434
172, Balence Sheets per Books Panhandle [stern Pipe A es
Line: Company and Subsidiary C ompanies, as at each -
December 31, 1930 through 1941 15307 = 5A37
173, Income Statement per Books, Period from April t, :
1932 to December 31,-1941; Panhandle Easte¥n Pipe Line
Company and Subsidiary Companies 1400 5443
a Surplus per Books, Period from: Comimence- i
ment of Operations to December $i, 1941, Panhandle —
Eastem Pipe Line Company-and Subsidiary c ompanies 152 WAT
75, Capital Surplus per Books, re ‘riod from September ‘1, , ;
1930 ta December 31, 1941,.Panhan le Eastern Pipe ‘Line
.
Conipany and Subsidiary Companies - - 104 S451
176; Gas Plant — Panhandle Bastern dad Line Co mn pany
and Subsidiary Companies as at each Dee er 3, (1930 ‘
through 1941... : - 15405 43453
177, Statement of Gas Produc ed de wied from Avril 1, 1932
to December 31, 1941, Pant, andle F astern Pipe Line
Company and Subsidiary C ompanies -" ° 1S47 HS
178, Statement of Gas Purchased from Period April 1, 1932
to December 31, 1941, Panhandle Eastern Pi Line .
Company and-Subsidiary Companies -- : 1540S) 457
179, Statement of Gas Revenue, Period from April 1, 1932
to December 31, 1941, Panhandle Bastern Pipe Line .
Company and Subsidiary Companies . ena 1400" ° 5459
180, Statement of Gas Revenue by States, Pericd. front . :
April 1/7932 to December 31, 1941, Panhandle Fastern
« Pipe Line Company and Subsidiary Companies 15410 5461
181, Net Additions to (ras Plant per Books Ogtober 1,1938 ~
to December 31, 1941. Panhandle. Eastern” Pipe Line =f
neneans and Subsidiary Companies LSS” 5462.
2, Comparative Statement of Depreciation, Depletion “
tam Amoftization of Unoperated leases authorized by
Board of Directors and the, amounts booked for. the
vears 1937, 1938, 1940°and 1941, Panhandle Eagtern Pipe — -
Line Company and Subsidiary Compames ‘ 15412 ° 5488
183, Statement showing Atnount of Depreciation claimed .
. in Federal Income’ Tax Returns and Settlement Basia
for the nine months ended December 31, 1932 and the
-years 1933 to 1940, inclusive, Panhandle Eastern Pipe ‘.
_ Line Company and Subsigiary Companies - ..., 15413 5463
KY a 7 S
: aie Original Frint
"1M, Comparative Statement of State, Local and Miscel- :
laneows Federal Taxes Paid with the Amounts Accrued
years 1956 to 1940, inclusive itt iG
IS5, Statement of Taxes Paid for the vears 1936 ‘through
190, Panhandle Easterh Pipe Line Company’ and Sub-
sidiary Companies: * , : 15415 SAS.
Ish.- Reconcilement Federal Income and Federal b-xecess . ae
Profits Taxes “Paid with Amounts accrued vears 1936
- through 1940, Panhandle Eastern Pipe Line, Company
and Subsidiary Companies } 15416 | 5467
187, Panhandle Eastern Pipe Line Company and Subsidiary
Companies’ Statements and Copies of Contracts with
Missouri Power and Light Company, Hlinois lowa Power
_ Company, Caterpillar Tractor Company, Keystone Stee!
& Wire Company, R. Herschel Manafacturing Company °.
_and Peoria Mallicable Castings Company, Excerptsfrom 15417 5469
Page 1, StSitement cone erning Contract with Misseuri .
“Power and Light Company - 417 = (5469
Page 2, Statement conce ring ¢ ontract with Niknois lowa Oe
Power Company _ 15430- 460°
Page 3, Stateinent tonce rnune « ‘ontraet with Caterpillar
Tractor Company 1542 70
. Page 4, Statgment concerning Contract with Keystone :
Steel and Wire Company ° *. ' . oo MTD
-Page 5, Statement concerning Contract with R. Herschel
» Mamufacturing C ompaby _ LHe 5472
< Page, 6, Statement cotwerning Contract with Peoria
_ Malleable C astings Company ; 15452 5472
Iss, Panhandle Eastern Pipe Line Company Annual Report :
for the year 1940, Excerpts from - 7 UMSR °5473 -
Pages 3 to 6, Annua! Report for 1940 aes LM5s (A738
i189, Panhandle Eastern Pipe Line Company Annual Re port . nes
for the vear 1941, Excerpts from ; VAT2 «(BATA
Pages 3 to $, Annual Report for 94h a... 18: Bete:
1%, ¢ ‘omparative Statement of Operating and Siskasasance
Expenses year ended December 31, 1940 and 1941, Pan-
handle Eastefn Pipe Line Company and Subsidiary, Com
panies ‘ 15s) 54AR3
191, Reconcilement of Net Sistas ner ay ree with Net; +
Income per Federal Income Tax Returh for the year 1329,
Panhandle Fastern Pipe Line Company 1400) age
192, Reconcilement.of Net Lacome per books with Net In
> come per Federal Income Tax Return for the year 1940,
Panharidle Eastern Pipe Line Company. - ” Yt 5491
193, Analysis of Keserve for Depreciation of Gas Plant,
years ended December 31, 1932 through 1940 and six’
Months ended June 30, 1941, Panhandle “Eastern Pipe
oe Line © ompany and Subsidiary C ompanies IM492 = SAB
* 194, Panhandle Eastern Pipe Tine C ompany and Subsidiary «
Companies pro- fortes, Consolidated Balance Sheet as of :
December 31, 1941 g/ving effect to financing Transactions -
consummated on February 6, 1942 and Acquisition-on
‘that Date of Capfal Stork and Debt of Michigan Gas
or ee ae 2 _ Original Print
Tranamiseior Corporation, and Indiana Gas Distribution. ;
Cc ‘orporation, and Purchase of C ertain Property of Ohie
Fuel Gas'Company ... 15494 5499
195, Panhandle Eastern Pipe Line C ompany and Subsidiary
Companies ‘pro forma Consolidated Income Account
(Noté A) for the vear ended Deeamber 31, 1941 15499 5505
196, Panhandle Eastern Pipe Line Company and Subsidiary 3
.Companies pro forma ‘Consolidate: i Income Account ety ds
_ (Note A) for the year erided’ December 31, 1941 as ad- 7 .
justed to give the Effect to Fede rai Income and Federal
Excess. Profits Tax Rates proposed in Recommendation — +
‘of Secretary of Tyefisury Mergenthan on March 3, 1942
before House, WAys and Means Committee . ' 15502 5509
197, Panhandle astern Pipe Line Cormppanwand Subsidiary
Corpanies Balance Sheet per bocks February 28,1942 | 15508 . 5513
_ 198, Panhandle Fastern Pipe Line Company and Subsidiary
~Cempanies pro forma Consolidated Income Account
'
2
— ~
(Note A; for the twelve moriths erided February 28, 1942 415510 5519
~~
199, Panhandle Eastern Pipe Line Company and Subsidiary -. i -
Companies -pro forma Consolidated Income Account fs
(Note A} for the twelve Months ended February 28, 1942
ax adjusted to give effect to Federal, Income and Federal
Excegs Profits Tax Rates proposed in Recommendation.
of Secretary of “Treasury Morgenthan on March 3, 1942
before House, Ways an? Means Committee . 15513 > 5523
200, Panhandle. Eestern Pipe Line Company and Subsi: liary,
Companies (including Michigan Gas Transmission Cor
ee and Indiana Gas Distributi¢n Corporation)
Comparative Statement of Gas Plant ys of December 31,
1939, Deceruber 31, 1940, June 30, fon, December 31; -§
"1941 and Februar¢ 28, 1942 ¥4 15517 4527
201, Michigan Gas Transmission. eraoestinn Gas Plant,
as at each December 3), 1931 through 1941 15519553
202, Panhatidle Eastern P ipe Line Company and Subsidiary ,
* Companiés, including Michigan Gas Transmission Cor-
poration and Indiana Gas Distribution Corperation,
Statement of estimated. Federat-ticome an® Excess
Profite’ Taxes for the year 194] _ based on the Revenue f
Act of 1941). - : ; 15520 = 5533
23, Paghandle- ‘Hastern Pipe L. ine Company and Sebsidingy ‘ ‘
Coyspanies. Statement of ¢ peration‘and Maintenance Ex
¢ pense year 1941 ‘restated to include Michigan Gas* Trans.
- mission Corporation and. Indjana Gas Distribution Cor.
poration for entire year! 15525 5541
204, Panhandle Eastern Pipe Line © orapany anid Subsi: sey Pad antl
~ Companies 1942 Construction and Retirement. Burl vets Sa
Summary by Companies "15529 5545
205, Pankandie Eastern Pipe Line Company and Sub sidiary if
Companies Statement of Certain Mstimated Construc-”
tiors Expenditures for the vear 1942 eee 15537 5556:
ar Financial Statement of Panhandle Easté qn Pipe Line
Company and Subsidiary Companies‘for the period
”
a ; ‘ : < =
ended December 31; 1941. Py cry “e 157833556 |
>
é.
™
; Original Print
- Financial Statement of pape raaaeeas Pipe Line Ae:
Company and Subsidiary © ompanies.../..... .. 15783 5556
Financial Statement of Ilinédis N aturalgins Company. 15822 5600
i Index, Volume XIII.
Financial Statement of Panhandle Eastern Pipe Line
Company ....... <a 15838 5630
/ Statistical Report of | anhandle ‘Béster orn Pi ipe Line’ Com-
~ pany and Subsidiary Conipanies.. 15868 5688
209, Letter of Panhandle Eastern Pipe ‘Line C ompany to
treit City Gas Company dated March 30, 1936 desig-
nating the Office to which the latter. Company -should ; ,
’ make Payment for Gas’ delivered mee to Contract -
OD BI Bs Me os noo Lec se nena Peace ane 15899 5748
210, Index Numbers of W hole ‘sale Prices of Commorities by
Groups (1926=100)....... - 159d 5750
211, U.S. Department of Labor, Bi srenui of Leties Statistics
Release of Marek 26, 1942 Wholesale Prices for the W eek *
ee Mare h 21, 1942... ..- 15902 5751
212, U. S. Department of Labor, Rede “aul of Labor Statisti 8,
‘ “Index Numbers of w holesale Prices of Adi C Semsnediiies
by Months, from 1890 to 1940 (1926 = 1009 . 15904 5755_
213, Table showing Average Hourly Learnings and Average pS 4
Hours per Week pera Wage Larner in twenty-five Manu-
facturing Industries from 1974 t% 1942 "145905 5757 .
2M, Graph showing Average Hourly Farnings and Average °
actual Hours per Week per Worker in twenty-five Manu-
facturing Industries from 1914 to 1942. “>
215, Tabie showing ‘!Employment, Payrolls And Average. : o
Weekly. Earnings in Representative N York State
Factories, from 1914 to 1941 employ ment | Index Numbers ;
with Average from 1925 to 1927:as 100)". 15913 ° 5767
, 216, Indexes of Wholesale Prices and Cost of Living fee
certain.months from 1913 to 1942 (1935-1934 100)... 15914 «5769
217, Graph showigg: Indexes Of Wholesale Prices and x ost
of Living from 1913 te 1941... f 15916-5771
218, Testimony of Mr. Joe D. Creveling tee the Sec u
rities and Exe hange Commission on November 29, 1941,
in the Matter of Columbia Gas « kL lec tric C orporation,
et al., Fide No. 59-33, ete, : fa 15917 577%
219, Panhandle Eastern Pipe Line Company Gas Salesancd——j a
Pur ‘hase Contracts, ¢ -of Report by Bureau of In-
ternal Revenue and Re lated C orresponde nee _..+. 4 15931 5783
Exhibit A, Statement relating to"Com parison of Values
of Assets transferred, to Panhandle Eastern Pipe Line
Company by Missouri-Kansas Pipe Line Company, ete. 15937 5789
Exhibit B, Se heduleshowing Sales of Various Units of
Pipe Line Construction sold by Shippey, Maddin ond
. Parish Gas Company, ete. *.... 15938 , 5790
Letter of Leith VW atkins, Sec etary: ( ‘ofitroller, of Pan. =i
handle Eastern Pipe Line Company to N. F. Paxton,
Assistant Secretary, Panhandle Eastern “Pipe Line - .
_ Company; November 7, 1941 A: a Oe ores 15940 6702
co . ‘ Mier
- ¢ q XY Ns Mors : ;
\
W aiver of Restriction on Assessment and C lec tion of
\epteon Print
Deficiency in Mr Acceptance of Overassessment “15012, 5704
Lettér of J. P. Wenchel, Chief Cougsel, of Treasury De-
partment to Parhandle Easterir Pipe Line ci nt
¥ April 1940. He 15
eo of Leith v. ' Watkins, ‘he retary- Céntroller, of
anhandle. Eastern Pipe Line Company to J.P.
ponent Chief ‘Counsel, for Treasury ‘Department,
August 21, 1940. ONE pT joel LOAF
Letter of J. P. W enchel,. Chief Counsel, of Treasury
Department to Panhandle Eastern Pipe Line C ‘empany, '
October 3, 1940. aes rr en
Letter of Leith V. W atkins, See rethry- f ‘ontroller, of Pan- 2 ,
handle Eastern Pipe Line Company to J.P. Wenched,
, Chief Counsel, for ne ees February 24; >
1941. wos. ? 16066
20, | ~anhandic Eastern Pipe Line ; eS E xce pte trom
- Minutes of Meetings of Board of Directors relating to.
provisions for Depreciation, Depletion, and Amortization 15962
Minutes of Febrnary 24, 1942 .,.._.. 15963,
Minutes of January 25,1941..." * ri tage
Minutes of Detember. 14, 1939 ae eae eae 15965
Minutes of December 22, 1937 ‘ : 15966
Minutes of February 13,1936. *- age ‘ :. 15067
Minutes of Februapy 15, 1933... + sae 15970
Minutes of May 5, 1932. . . .. + 16672
221, Panhandle Easteri: Pipe Line Company and Subsidiary
> Companies C omputation of working Capital Requiremetit 15975
Companies Computation of Average return Earned on
Bae Net Investnrent for the nace April 1,-1932 to se ceniber
Sl, 1041. ./....: 15YS0
222-4, Panhandle Eastern Pipe Line Company and Sub-
> sidiary Companies Comparison of Average Return-Farne:|
on Net Investment for the periods April 1, 1932 to Decen-
ber 31; 1936; and January 1, 1937 to December 31,1941” 15982
223, Panhantile Eastern Pipe Line Company and Subsidiary —
Companies substitute Estimate (lgss economic) of Addi-
tional Capital Expenditures’ South and West of Liberal
Compressor Station required to meet Peak day Sales of
307,000 M.C.F., 1942... 88
224, Panhandle. Eastern Pipe Line C ompany ‘and Subsidiary
es - Companies substitute Estimate (less evonomic) of Addi-
tional Capital Expenditures South and West of Liberal
‘ i ompressor Station required to meet Peak- lay Salea of
’ 338,000, M.-C. k,, 1942... : i504
: 225, Panhandle Eastern Pipe Line Company and Subsidiary
Companies Estimate of Operation arg! Maintenance Costs
‘South and West of Liberal Compresapr Station, 307,000
.M. C.F, Continuous Daily Sales Capacity Operation at .
70° Capacity Factor 15085
226, Panhandle Eastern Pipe Line Company and Subsidiary
Companies Estimate of Operation and Maintenance Costs
XY
@
5812
SSIS Pa ‘
_ SSLS
5818
5819
5820
5820
5821
5830
222, Panhandle Eastern Pipe Line.C ompany and Subsidiary ine
5838
‘ 5839
South and West of Liberal Compressor Stations, 307 ,000
‘M.C. F. ‘Continuous Daily Sales C apacity Operation at.
. 90% Capacity Factor... tT 55087
227, Panhandle Eastern Pipe Line Company ani Subsidiary
. Companies Estimate of Operation and Maintenance Costs
South and West of Liberal Compressor Station, 338,000
M. C. F. Continuous Daily Sales Capac\ty Cyecelion at
70°, Capacity Factor... : . 15989
. 228, Panhandle Eastern Pipe Line C ompany nd Subsidiary
Companies Estimate of Operation and Maintenance Costs
South and West of Liberal Compressor Station, 338,000”
M. C. F. Continuous Daily Sales C apacity )peration at -
“90% Capacity Factor.. thi ° 15991 —
229, Capacity Study April 7, 1942 c ontinuows Dyily Deliv."
ery Capacity — 307,000 M.C. F. 15993
230, Capacity Study April 7, 1942 complete ly Idoped and
econoinically powered Main Line System with Economic
_ Production. Transmission Expenditures -.:.... 15908
231,. Capacity Study April 7, 1942 revised completely
looped and economically powered Main Line System with
less Economic Production-Transmission Expe nditures 16003 ©
232, Michigan Gas Transmission Corporation Computation
Sof Average Return Earned on Net Investment for the
period March 1, 1936 to December 31,1941... 14008
233, Prospectus Panhandle Eastern Pipe Line ( Company.
$10,000,000 First Mortgage and First ‘Lien 3° Bonds:
. Series C, due January 1, 1962, and 150,000 shares 5.60°;
Leetiatiice Preferred Stock, —— from 16009
Paget... : ‘ ; 16009
Pages 3 to 8, Appligation of Proce eeds, ete. 16011
co: Pages 11 to 18, Certain Proposed Acquisitions, ete. "46019
"Page 16, Letter to Board of Directors, November.J3, L941 16024
Page 66, Notes to Balance Sheets . 7”. 16075 |
- @ Page 69, Notes to Income Account. 16078 —
234, Surumary of Construction and Retirement Budget and
Work Order Procedure. ; 14095
’ 235,.Panhandle Eastern Pipe Line Company and Subsidiary
_Conipanies Statement showing the Computation of De:
" preciation for Federal Income Tax Purposes for the fear
1939 as claimed in Federal Inc ome Returns... 16097
236, Panhandle Eastern Pipe Li ine ‘Company ani.Subsidiary
Companies Statement showing the Computation of De-,
preciation for Fede ral Income Tax Purposes for the year.
1939 on the basis as settled. with .the . Bureaueof* Internal
- Rewenue.....- : ; 16005
237, Panhandle Eastern Pipe Line Company and Subsidiary
Companies Statement showing the Computation: of De-
preciation for Federal Incorte Tax Purposes for the year
1940 as claimed in Federal Incoine Tax Return... - ... 16099
238, Panhan lle Eastern Pipe Line Corfpany and Subsidiary,
~' Companies Statement showing the Computation of De
preciation for.Federal Income Tax purposes for the year
1940 on the basis as settled with the Bureau of Internal :
Revenue............ ee ie 16100
RK
: Original Print
5845.
5407
9 ; - Pacha ‘ 3
: * “ = ‘,
. ; : “Original Print: 3
243, Panhandle Eastern Pipe Line Cc ompany and Subsi linty
‘Companies Statement of Estimated Federal Income and a
/ Excess Profits Taxes for the 12 months ended Februaryg, ..° -a°
* 28, 1942 (based on Revenue Act of 1941; pitkags .. 16105 5911
‘ou, Panhandle Eastern Pipe Line C ompany 2 an: nd SiBsidiary . — To
Companies + Statément of Budget. Items inc lauded in e .
Exhibit No. 205.. ‘ WHOS 5917
245, Agreement between Cohwabia Gas. & Electric Corpora-
tion and Panhandle Easrern Pipe Line Cc a dated “ia
Febryary 5° 1942..... ev ugh i 16110 5421 Ps vige
"246, BRanhandle Eastern Pipe Lise Company aa Subsidis — Ss .
Companies preliminary Deterinination of the second In. °° “4
- stallment of Purchase Pricé to be paid to Columbia Gas ~~ . : ae,
& Electric Corporation, computed in accordance with - 6
.-* + Pravisions (Paragraph C) of the Agree ment between E % ie os
Columbia Gas and Eler¢trie Corporation and Panhandle 2 .
° Eastern Pipe Line Cothpany dated Febraary 5, 1942 - 16923 §932 - " =
247, Panhandle Eastern Pipe Line Company and Subsi: liary ,
& ‘ompanies Statement showing Certain Increased Costs
not fully Present in Income’ Account (Exhibjt 195 -an! ae
196) for the year IM41__.- Me . “TAIZT +5933
248, Panhandle Eastern Pipe Line, ( ‘ompany and Subsid lafy ~*~ J
Cénipanies pro forma Consolidated Incume Account for
the year ended December 31, 1941 - 4 Wil25 5035 i
2, Panhandle Eastern Pipe Line Company and Subsi: lary iota -
Companies pro fortua Consolidated Leceome Account for. nie Sew
. the year ended, December 31, 1941 Note A), cas aljuste:i : a
to give effect to Federal Ineome and Fede ral Excess : ; x
- Profits Tax Rates proposed in Recommen lation of Secre
tary of Treasury Morgenthau on Mare bS iPt2 before. * .
House Ways and Means Commutice, “WQS 5030
250, Panhandle Eastern Pipe Line Company ani! i Sub sidiary -. :
Companies Statement of Rate C ase Expe nses itr Conner. AER a
tion with, Federal Power © onunission Conseli lated! ie -, _——
* Dockets G-200 ahd G-207 including actual. cost to Febru. he pa ne re
ary 2k, 1942 and Estimated C oat te comple “aS 16431 6042 --° °, =¥ |
250-A, Panhandle Eaafern Pipe Line Company an® Su ree =
sidiary Companies Statement of-Rate Case Expenses iv.“ ge
Connection with Federal Power C ‘piamission ( ‘onsolidated : nis
Dockets G-200 and G-207 including actual Cost to Febru = ;
ary 28, 1942 and Estimated Cost toyomplete </> - ISLRIA 543
251, Panhandie Eastern Pipe Line ¢ Tiny np ap Subsisiary ae \
Compdaies Statement showing prafforma Consolidated ie
Net Operating Revenue as adjusted for a full Ye ‘ar's Cost : * 4
(Note A) as allocated between regulated and nomre Lug. ¢ 5
* Tated Sales for the year ended December 31, 1941... ltsst° SOT * \
an, Panhandle Eastern Pipe Line Company and Subsidiary io
Companies Additional Information Teque Sted ‘in re Ex- ae ; i! {
hibit No. 17 LGISS 6 54656 } ‘
253, Study relativé to Minimum Return ecules ments of. : f ‘
Panhandle Eastern Pipe Lin¢é Company ‘giving E flect to. *. | - |
Property Acquisitions) prepared by Paul B. Coffman 1145 S46] ;
Chart No. 4, Condensed Actual and pro forma Balanve -* ‘ “4°
Sheets of Panhandle Eastern ng Line C ompany asof oa
. December 31, 1941 ve fies ~ 16140 5967 ie)
: Ghart No. 3, Pr die nt Earfed on Invested, ( ‘apital of Pan-
&
Sale “Index Volume XIV.
_ ee Print
- Chart No. 2, Trend of Revenue and E xpenses of Panhatidie
Eastern Ripe Line Company from-1982 to 1947 and pro -
forma.. os 7 “w
handle based uporw Net Gas Plant =“ Working ¢ ‘pital -
from 1932 to 194) _ lola.
Chart No. 4, Percent Earned on lnvesied C ‘apital of Pan- :
handle based upor Capital Structure from 1932 to IML. 16152
Chart No. 5, Return te Common Stockholders of. Pan-
hafidle Eastern Pipe Line Company from 1932 to 1941 16158
Chart No. 6, Pervent Earned gn Invested Capital of Pan-
hatidle pro forma fer i2 Months ended February 28, 1942 16154
Chart No. 7, Percent Earned en Invested Capital of Pan-
‘handle proforma for 12 Months ended February 28, 1942 46155
‘Chart No. 8, Working ¢ ‘apital of Panhandle Fastern Pipe --
Line Company is being Reinvested in Fixed Assets 161567
Chart No. 9, Effect. of Sinking Bund and Maturity Pre-
Visions of Debt and Pre ferre d Stock of Panhandle Kast:
ern Pipe i ine CG FE Pare seer 16157 - SUs3 _
( a No. 10,* Investors’ Appraisal uf Overaii Capital
Risks i in Various Divisions of the U tility Industry from
4937 to’ a : ; 1615s
Chart No. Investors’ Appraisal of Overall Capital
tisks 133 Sh le Industrial Companies . > ise
hart No. 12, Panhandle Eastern Pipe Line “‘Conapary—
invested Capitatas of Fe ‘bruary 2s, 1942 , > W6o
-Chart No! 13, Cost of Financing | ‘anhandle Eastern I’ ipe. ‘
‘Line’ Com-any First Lten- and. birpt Mortgage Series.
“C"'-S: PF. 3's-dug January 1, 1952 A *. 16tel
Cliart No. 14, Historical Costs of Debt Capital of Pan
handle Eastern Pipe Line C ‘ompany frotn 1930 te 1942 LEM 2
Chart No. 15, Cogt.of Financing Panhandle Eastern Pipe
Line Company 560°; Preferred Stock. 20.000 5° 16s"
Chart No. 6, Mistorical ‘osts of Preferred Stock C apital -
of Panhandle Eastern Pipe Line Compariy from 1936 to *
1942"... .< , . ro fe Xf Widtd
Chart No. #7, Record of Satgs-of Panhandle Eastern Pipe
Line Cothpany 540) Preferred Stock to“Public from
February Ato Maren 30,1942, .- . 16165
Ghart No. Ik, Price to Public of Panhandle Eaate orn Pipe
- Line Company: 5.4. Preferred Stock, fedae edon April - 5
: 2, 1942 : i .. 16166
Chart No-19, Record of Sales of Panhandle Easte 2a) Pipe ;
Line C ompany 5.60% Preferred Stoc k to Public from
‘April 2 to April 10, 1942... inet 16167
Chart Ne--20, Assume! “Cost, A Financi ing Panhandle -
Eaatern P ipe Line C ompany 5.40", Preferred Stock |. 16168
Chart-No. 2V, Barnings — Price Ratios of Natural Gas
* Pipe dine Coripany Common Stocks from 1937 to 1941, 16109
Chart No. 22, Average “Barnings -—. Price Ratios. of
, Natural Gas Pipe L jne ‘otipany Cc pinion Stocks from
1987 to WML a : i oauigs Se
- ®
16150 56D
— - . “¢ ‘ - } : "4 rs Py — dest
‘ \. F + ——<— :
597 1-
5973
-~
© N75
=~
, 5977
=i
5a7u
‘hus!
“SUNS
oun
Susy
RO .
593
“$007
a9
6oor
6003,
6005
. 7
Chart No. 23, Ac cepted Earnings — Price Ratio for Pan
handle Eastern. Pipe Line Co? Common Stock \
Chart No. 24, Minimum Earnifgs required for Common
Stock of Panhandle Eastern Pipe Line Cofnpapy
‘Chart No: 25, Minimum Earnjngs required to Maintain
s
“Cretlit Position of Panhandle Easter Pipe Line Com-
WI icc as .. \
Chart No. 26, Minimasn Earnings equal to Maifitain
Original Print °
6f71 “¢oll |; 2 | |
ai $ ry
16172 "6013
16173 6018.° °C ;
Credit Position of Panhandle E astern Pipe Li ine Com-"
paty ~
Chart No. 27, Prime Meney Rates Monthly from 19 to
-WRareh, 1942.
Cc hart No. 28, € ‘omsiereial Lost Rates C harged C ustom.
ers by Banks i in Prine iy C ities — Monthly, from 1930. -
ter 4 G42
Chart Ne. 29, Yiek Is on ‘Uv. S. Government and High
Grade Municipal Bonds Montitly, from 1930 to.March,
1942 as 2 .
“Chart Not 30, Standard’s Highest Grade (Alf) Cor-
porate Bond Yields Monthly, from 1930:to March, 1942
Chart No. 31, Standard’s Corporate Bond Yields — by
Quality Rating Monthly, from 1938 to March, 1942
“¢ ‘hart "No. 32, Standard’s Public Utility Bond Yields —
by Quality Rating Monthly, from 1937 to March, 1942
Chart No. 33, Bonds,. Debentures and Notes. issued by
Natural ee Companies from 1936 to 1941
Chart’ No. 34, Bonds exd-Debentures of Natural Gas
“> ompaniés s eh i from January aL 1934 to December 31,
1941
Chart No. 35, Y idk ison 1 Ne w Security ‘Tgsues of Naturat,,
Gas Companies avcording: to’ Quality Rating, from
. 1936 to 1940 °
Chart No. 36, ‘Ideal Rarnings ane rage Ratios for High
Grade (A Group) Natural Gas-Company Bods
“on poe N Le 3F, Debt C overage Ratios fork | Paso Nati iral
oh .
Gas € ompany Actual ani A ‘usted to a 61) 2% Rate
of Return. .
Charct_No. s..,Debt Coverage ‘Ratios for Northe rh
Natural Gas Ci ompany Ac tual and| Adjusted toabl/2",
Rate of Return ,
Chart No. 39, Debt Covdtize Ratios for Sovithes Tn
Natural Gas C ompany Ac tual and Adjusted toa 6122
Rare of Return” :
Chert-No. 405 Debt Coverage Ratios for C ities Service
“Gas Cotonany Ae tual:and ‘Ne sete toa 6127 Ratt
. of Return
Chart - No. 41, Debt Pubiocas Ratios for Mississippi
River Ful Corvoration Actual ‘and sind toca
6-1,2°. Rate of Return
Chart No. 32, Debt Coverage Ratios for Natural Gas
Companies Adjusted to 6-1/2", Return on Net Property
and Working Capital... ‘
16174 © 6017
16175 6019 ti,
16176 6021
. ‘
16177» 6023
16I78 * 6025
ne
16179 6027
16180 6029
IGINL §=660BL 8
“16182 6033S
iiss § 60aF
1GI84 037
LGISS = 6039
16186 GOAL
16187 O43
e
16188 ° 6045
i61RB— 6047
16190 HO49
:~
ugh Stow ks 158 Stable Inglustrial ‘ ect aac
y - . . ev ,
” *
®
°
Bagel: Debt Coverage Ratios of Panhandle Rasts
ern Pipe. Line women. at Various Lev rele of Net
Operating Revenue. :
Chart No. 44, Debt Coverage, » Ratios of Panhandle Haust-
ern Pipe--Line Company at Various ‘ Levels of Net
(perating Revenue. ; ri
Chart No. 45, Effect of. Tne reased Cross Res yrénue and
Taxes upgn Panhandle’s Net Ope rating Revenue
Chart No. 46, Calculation to show Rate of Return Neces-
_ sary to Produc € $5,382,677 — Assuming Various Rate
Bases... '
- Tables supperting Ve arious © harts : ane,
254, Investors’ Appraisal of ‘the Risks of Capital in th3"
Stable Industrial Compspies for the vears 1937 to 1041,
inclusive, prepared by Paul B.-Coffman - ;
Sa 8
Common ‘Stocks were Listed on the New York Stock
Lixchange front January 1, 1932 to April 1, 1942, ete
* Section H, Summary showing Compntation of ‘Investors’
Appraisal ‘of the Risks of C apital represented by 153
Stable Industrial C ompanies’ ¢
‘Section LIL, Working Papers showing the 4 ‘omputafion of
‘Investors’ Appraisal of the Risks of Capital’ of each
of the “153 Stable Induccrial Companies
. Index, Volume XV. and XVI.
Section IV, Workigg Papers showing the-Conutputatjon of
‘Lowestors' pine pe of the Risks of Capital’ im the
Natural Gas Industry as compated with other Divisions
of the Utility Industry for the fall Year 194i, ete
255, Letter of Panhandle Eastern Pipe Line Company dated
April 11, 19°? to Mr. Park Chamberlain, swtd-Tabulation
f C ‘omparacive Statement of De mand ( Farge so under
Original and Supplemental Contracts, Panhan le Eastern
Pipe Line Company and wscicnr sar Consolidated, Gas
Company for Detroit.
25, Letter Agreement between ( ‘sdeedih a Oi & Gasoline
’ Corporation, National City Company: and Missouri”
Kansas Pipe Line Company, dated September 19, 1930
and Contract dated September 17, 1930. .,
257, Panhandle Eastern Pipe Line Company and Subsidiary .
Companies Reconcilemnent of Net Income per books with
* Estimated Fxeess Profits Net Income for the year 194]
258, Holding Company Act’ Release No. 3415 dates April &,
1942, Findings and Opinion of the Securitiessand Exchange
“Commission in the Matter of Columbia Gifs & Electric
Corporation, File Nos. 59-33, ete. :
Order requiring Divestiture pursifant to Section 11 (b)
(1) and Redistritution of Voting Power pursuant bo
Sertion 11 (b) (2) 4
_ 254, Weightell Average Parninys ~ Price Ratios on Com-
ae RS
Original, Print
H6191,
16192
IH1Y3
16104
6196.
W242”
Section I, Complete List of Industrial Companies whose —
124
1250
1254
rT 30.
£582
1B585
1H595-
i509
Lindy
te Uae
.
HO55
HOS]
6053
6057 .
HO]
eS
O77
OS34
Os3a
BSS
HSOb
OmMOS
$e?
3
Ty gc
7 . -
-
260, Panhandle Eastern Pipe Line. Company Status of Pro-
_ posed 1942 Construction Program, Productiofr almsGiath-
ering System South and West of Liberal Station
261, Panhandle Eastern Pipe Line Company and Subsidiary
Companies Main Line System Approximate Coinc idental
_ Maximum Day Sales during the Wynter Periods of 1940-
1941 and 1a4l 1942.
Original! Print
16609. BRAK
‘16612 >. 6871
262, Panhandle Eastern Pipe Lige-Company und its Sub- 2
sithiary Coftipanies Loan eater Custymers Curtailment -
Coe
— January 412, 1942.. 16617 SSE
& Panhandle Hastern ‘Pipe Line Cojupany and Subs
tdiaries Allocation of Adjusted 1941 Costs be ‘tween Regu-
lated and Non-re ‘gulated Sales x 1881S . 6883
204, Index of Gas Rate Sehedule of Llinois Natural Cas
Company, Michigan Gas “Transmission Corporation and .
Panhandle .Pastern Pipe Line Company. iei21 68807
Schedule 12, Gas Contract between Panhandle Kastern
"Pipe Line Company and Detroit City Gas Company,
, August’31; 1935 ‘ 7 1 6889
Supplement 2 of Schedule 2, Supplemental Gas Con, .
tract between Panhandie Lastern Piye Line Com
pany and Detroit © ‘ty Gas Company, June 2, 1936 1 6820
’ 206, Financial Statement of {ndiana Gas Distribution Cor :
poration fyr Period ended December 31, 1941. ies = 6929
267, Panhandle basterPipe Ling! company and Subsicliaery
" Companies Comparative Balance Sheets. — per books, ,
Comparative Earnings Summary — per books, Adjusted
Earnipzdgs Sumtuary and Gas Plant per books as of
March 1, 1941, and Mareh 31, 1942 LwiTh | B93
Complaint of City vf Detroit and County of W ayne, Com
plainants v. Panhandle Eastern. Pipe Line Company and
‘Mic higan Gae Transmission © orpory ation, Defendants, filed
Februar 2s, Isl, Federal Power Corrininesn n, Docket
No. G20 : Lose” TOUR
Separate Answer ot Mich ican Gas Transnussion Corpo ation
filed March 28, 141 in Docket Noo G 200 0. "16893 7008
Petition of ‘Michigan’ Public Service Conunission for Leave
& to intervetie filed March #1, 1941 in Federal Power Com. -
mission, Docket No. G- 200, rarer eas - }ewias * TOLL
separate Answe r of Panhandle Eastern Pipe Line Cotnupany * ne
filed April 3, 1941 in Federal Power Conunission, Docket
No. G-200 IA705 TOMS
Order entered June 10, 1941 fixing date of Heartny in Fe lerss “
Power . 8 oOmimiseton, Dus ket Noo Gr 200 16715 ° 7022
. Order entered ‘June’ 10, 1941 persatting the’ Mic higan. Publie
* Service Commission té intervene.in Federal Power Cor so
nussion, Docket No. G-200 Es a GTS TAS
‘Petition of Panhandle Easte rn Pipe Line ¢ ‘ompaiy tiled June °
26, 1941 for Continuance of Hearing in Do Ket No. G-200. i8720 0 7025
‘Cone urring Petition of Mi Vinan (ous Pranamission Corpora:
tion tiled dusty 2, it¢l for ‘ ontinuan ‘ec of Hearing 1n Docket
No. G-200 Pen a lo72s = 7030
, 4
; me Original *Print
Objection of City of Netroit-and County of Wayne to Defend-
—-ant’s Petition for C ontinuance of Hearing filed July 3; 194] t
in Docket No. 6-200 | , 16733 7032
Federal Power € ommission’s Designation of Trial Examiner 16736 7034
Order entered July 8, 1041 denying Petitions for Continuance — *
of Hearing in Docket No.G-200.0 0... 16737 7034., i
Petition ‘of Michigan Consolidated Gas C omiany’ tor bea ;
_ to intervene filed July 10, M411 in Docket No. G -200........ 16739 7035
Petition:of Intervention 18744-7088
a entered July 121941 permitting Mic biiekn t ili Aehad : : ;
Gas Company to intervene in Docket No .G-200 eee . 16755 7046 ¢
‘Angwer of Siichigan Gas Transmission orporation ta Peti
tion of Intervenor, Mic higan C onsoli: lated Gas C ‘ompany = 16757 > 70A7
Angwer of Panhandle Eastern Pipe Line Company te Petition ; ; é
‘of Mic higan. Consolidated Gas Company, Intervenor, filed : ¢
August 18, 1941 in Docket No G-200 | T6762 7051” ,
Motion-to Dismiss filed by.Panhandle Eastern Pipe Line . -’
. Company on August 20, 1947 in Docket No. G-200 ; 16771 7058
rn to Dismiss filed by Michigan * Gas Transmission
_ ‘Corporation on August 21, 1941 in Dacket No. G-200-: 16773 7059
Order of Federal Power Commission@ienying Motions to ay
Dismiss of Panhandle Eastern Pipe Line C ampariy and» >
Michigan Gas Transmission Cc ‘orporation 16775 ° 7060 °
Order of Federal Powe “f Commission entered May 22, 1941 ;
instituting Investigation in Dov ket No. G-207 € 16776. 7061
- Order’of Federal Power Commission entered Se ptember 2, Dats
{ 1941 ponsélidating Proceedings for Purposes of Heuring, : ‘i
DiGrets Nos G-200 and ()-207 . 16779 7064
Petition of Panhaniile Eastern Pipe Line Company ae ;
February 4, 142 for Continuance of Hearing —— - _ 16799 TOKS
Objection of City of Detroit. and County of Wayne filed
February 11, 1942 to petition for Continuance of Hearing = 16809 7076
Order of Federal Power Comunission entered February 17, -
+ 1942 denying Petition for’‘Continuance and Changing Place : .
of Hearing, in Dockets Nos £5200 and G 207 ‘ «16811 7072
Petition for C ene of Hearing filed by Panhandle Fy ‘ast- ais
ern Pipe Line Cotipany and Michigan Gas Transmission y
Corporation on February 28, #942. ©. aS, ne » 16814: 7073.
Exhibit A, Liinitation Order L-31 to curtail © onsutiption ‘ §
of Natural Gas 168230 7079 oe .
"Exhibit A, Areas subject te Prohits itions container in
Paragraph ‘e) of Limitation Orde r 13) . I6n2s
Order of Federal Power Commission entered March. 26, 1942
enlarging Investigation «ol m aking Ilinois Natural Gas *
Company a Party Responde nt’ jn Proceeding De ‘signated ;
Docket No: (,-207 . mS : 16834" 7088. .
uMotion of Counsel for Federal Powe rc pewaniieatins filed April
‘27, 1942 praying that the Federal Power Comission enter .
an imntediate Order fixing just and reasonable Rates...» 16839 7091
Motion filed ‘by Michiran Consolidated Ga Company ‘on
April 27, 1942 praying that the Federal -Power Commission
enter an immediate Order-reducing Rates. -: ‘fain frers cas Oe FOR
r : - ,
; ‘ ee, ate ; Original Print
“Motion filed by City of Detroit and County of Wayne on April
27, 1942 praying that the Federal Power Commission enger
- an immediate Order reducing Rates _ ‘ -.. 16853 7100
‘* Amendment to Motion for Order reducing Rates filed by ae tee
ie Michigan Consolidated Gas C ompany on April 28,1943. 16860) 7104-- - .
: Statement relating to Exe O88 Return for vear 1941 and Re- : 4
duction of Grogs Reve nues req: tired to eliminate Excess. :
Return... 16865 7107
Excess Return for year 1941, heforg Adjustment of Claim
for Replacements. ee / 16866. 7107
Rate Base for year: | Se a nat 16867) 7100.
Income Staten at — year 1941 re 16868 7111; | |.
Amortization of Investment... ; ‘ J6871 7144 : -
-Annual Accrual Kate for Amortization .of Property as of : i
June 30,1041 ee a 16872 7115 ‘
Annuat Accrual for Amortization of Property at June 30, a :
1041 ' . 16873-7116 %
Depletion | seeks 16874 -7116° +
“Excess Return for year 1941 ; : tases ces SE FEE 4
Rate Base for year M1. Essien <2. Se OES St: ,
Income Statement. — year 1941 mie : ware Ti. *:
Ajustments to iM4, fitcome ‘Statement for ( ‘hs anges in 4 :
Operating Expenses net sess! effective for‘Entire Calen- ~ : ) aay =:
dar year 1941 : 16878" 7121
Stipulation of Coupsel for the various Parties and Federal © | :
Power Commission® Cotinsel consenting to withdrawal of 3 Z
Federal Power Commission Counsel's Motion for Imme “fiate .
Oriler reducing Rates filed May 11, 1942 ~,. W6RBL 7123 -
Motior of Counsel for Federal Power Commission for Imme- “—
diate Order reducing Rates filed on May 11, 1942) - 16882-7125
Opinion -Numbér SO of Federal Power Commission, “Memo- ; ie
randum as to Order of Fe: le ral Power C ommuission reducing | R
Rates, Séptember 23, 1942, Memorandym as to’ ~ 16892. 7133
Petition of Panbandle Eastern Pipe Line Company, Michigan ;
‘Gas Transmission Corporation and. Hlinois Natural Gas erat q
Company filed October 9, 1942 requesting an extension of fa :
time within which to file new Se hedules- of Rates_and +) ; :
Charges... . 16934 7134 eee
Order of Federal. Power Commission of Detober 12, 1942 , 3
4
granting Extensions of Time to Panhandle .Eastern Pipe.
Line Company, Michigan Gas’ Transmission Corporation
and Hlinois Natural.Gas Company to file new, Schedules of
Rates and ( "harges : ...% 16688. 7137 ; >
ese af Parihardle Eastern Pipe Line Company, Michigan -
Gas Transmission © orporation and Jlli nos Natural Gas
» Company ‘filed October 23, 1942 for stay of the Federal iy bane
/ Power Commission's order‘of September 23, 1042 2 | 16040 7138 si ..
— of Panhandle Eastern Pipe Line Company, Michigan age i? ;
Gas ‘Transinission Corperation . and Iiinois Natural Gas 3 ;
Company filed October 23, 1942 requesting a rehearing | y. ae » t
“Dockets Nos. .G+200 and G-207. ' 16044 7i41
Order of Federal Power Commission. of Octo ae 30, 1942 os j
denying Petitions for Rehearing and for Stay in Dockets . aj
Nos, Ga aad G-207.. : Saks mais - 16054 7150 ©
ee. pee YX | i — os
.
Cc crtificate to Transcript of Federal Power Commission. . . 16955
Order of United States Circuit Court of Appeals directing
Respondents to Show Cause w hy Petition for Stay of Rate
Order should nat be granted: 5 "16086
Order of United” States Circuit Court of Appeais denying
Petition for Stay of Operation of Rate Order without
prejudice, etc..... a . 16087
Oz ler of United States Cire “init Court of Appeals granting’
Stay-pending further hearing of application therefor 16988
_ Order of United States Circuit Court of ypeals granting .
Stay of Order of Federal Power Commissioh dated Séptem-.
ber 23, 1942, requiring reduction in rates and c harges for gas
furnished by Petitioners, etc. . > 16089
- Order. of United States Circuit Court of Appeals appdinting
John G. Hughes as Custodian of Funds to be impounded:
under provisions of Stay Order... td 16991
Order of United States C ircui€ Court of Rapeads as to form—
of record to be = and fixing time for filing desigaations
ee a ee ae 16992 :
- Order of United States Cireuit C ourt of Appeals lente ting
Cc ustodian as to manner a — fundand securities in
his possession , 16993
- Order of F nite States Ci ire uit Court of Appeals authorizing
- Custodian to purchase certain securities as Inve stments ° 16005
Order of United States Circuit Court: of Appeals directing
Petitioners to pay to Crstodian certain sums to cover
Bond premium, ete. 2 16907
Order of United Statés Cireuit Court of Appeals reguiring wate
- Custodian to sét up Aveoant No. 1 anil Ac count No. 2, ete. - 16909
> Order of United States Cireuit Court of - Appe als authorizing
Custodian to purckgse Certain securitied, ete! : 1700)
Stipulation that coloting matter appearing on certain Ex.
hibits may be omitted — copies inserted in printed,
record, ete. gene * 17003
a
< * Pee
Appearances of Counsel for Petitioners Tide
s. ‘2 - Oy
Appesrances of Copise! for Respendents W195
we kee)
Order of Submission e =
%
Order fier Resubniission ef Case . ; ta “)
. 73)
Order resetting case for argument 5 e201
$ ' er ie - . MV
Order of Resubmission > : 3 ni
Opinion, Laaieeberrouit Court of Appeals . ‘ 7203
: * - * - . ‘ oe OO"
> Judgment, U.S. Circuit Court af Sppeals + bc
tin i ‘ : “tgs ~ DON
Clerk's Certifieate #0 Transeript ; "°° tee
a ee Pe : : Ae
pe ie aay:
tender allowing vertior “* pe
’ 54 te
bad .
“Original Print
7151 :
7179
7180 .
7185
7186
7187 -
© \ 7
, ho ° ; « . : . ; < é ee
‘that run for years inte the-future, =
: ae | . * 1025
(fol. 3207] Q: Well, Mr. eka are all of thé sdles show
iv Lines 11 and 12.called **industrial sales in Indiana and
Ohio” to be made through distributing companies?
In other words, Me any of thee - ales to be-made directly
‘to the industrials? > Pri nate tog gs
A. My estimate contemplates no direct industrial sales
‘by Panhandle Eastern. . Of course, that is a matter of dis-
cretion to.the inatiagement in vears to come; but; as regards
this particular estimate we are speaking of, and as far as
[ have anything-to do wjth it, why, it has‘been prepated on
‘{fol. 8208] the basis of sales. just as they are Now being
made. -
©. 'Q. Are all of those sales presently contraeted for and
being made to persons who are being served?
A:* T wonld sav that this estimate of mine, like ‘all of
Any estimates that. T have: made hare, contemph: ites: Some
new customers but 95 pe reent Of it is toe usfomers who aré
how connected.
Q. You cannot give us the cmaumes of the. new: customers ?
*, A. I eannot. ;
Q. By the term **customers’’; av you have used it, ‘are.
you referring to. the industrial customers or to the dis-
trilgiting company? ‘ ;
A. I mean beth. I-think that there will be : an inerease in -
the individual eustomers -purchasing from: distributing
companies. over the years, and] think also my estimate
ge ates possibly’ the addition of another: (listributor
rtwo. | rege . q
a iat | ’ :
‘You-see, vou ¢annet be too definite about these’ estimates
..Q. «1 do not.recall whether 1 asked: vou for the page
numbers of vour working papers? = ¢
A. No, voualid not, on that particular estimate that Wwe?
are discussing: an@ work sheet No.5 covers all of the details.
that I have. : ’ ; .
-Q. And you will submit work sheet No.5 along with the
others? . - * “4 ,
[fol..3209] A. Yes, sir.
6512466"
o
2
e
a.
\.- - Now, will vou please e¢ plain the method used by you
im arriving at thie estimate shown in Lines 13 and 14 for
“Indiana and Ohiv-Other (Ine Juding Compuny Use)’??
“A. Yes, that estimate covers all of the sales that a]
“estimate will he made in. Endiana and Ohio, outside of the
industrial which we have just been discussing:
. - ? . ‘
That sale comprises the domestic and commercial: sales,
principally, of distributors throughout the State of Widiana —
and @ very, very small sale in the State of Ohio; so small
‘as hot to merif any e xtende d discussion,
©
That ‘figure, as \ say, Is ‘sdeaont entirely a sale of domestic-
commercial “to distributers in) Indianay namely, —Pabtte—
Service Company oof Indiana, Nérthkern Tudiana Public
Service Company, ‘Central Tndiana dias Company, -Indiana’
Gas. Distribution Corporation and Kokomo Gas & Fuel
- Company. -..> - “eae ee
Now, that estimate,vou will notice, increases, ve ry slowly
P Lrom Vear to vear. At the _— Se nt time, it is running about
—DHOO,000 Moe. fey pep 6 bere M.
. as 7 ry />
° = oo °
; ® } ees :
bd * ~ .
: 3 - rs e ’ ”
Ty UM OOO), l estimate : a. oy one pene :
(). (Interpesing ) Just aiminutes Five bilhon—
= : mi Acris Rive million, two hundred thousand,
Ea! ¥ a, Aol te ae ie . a om,
“hank vou. She ae
re I estimated for 1942 .an mesa te vrai aa :
6,409,000 M.
[ fol. S210). 6,800,000 Mo eef., 720000, ay
Q. That is-aflat Increase of- ; :
A. . (Interposing) 400,000 Moe. tf per-evear, a rather
eradual, nominal increase. . That’ is based upon the. fact
Ahat | do cnot.see any great expansion of natural-gas eon:
Sauption Th Indiana for domestic commercial * Hse in the
near future. : a, :
Ido not contemplate any addition of any large number
af customers, but just a slow, gradual growth of the pres-
cently connected enstomers, and possibly avery. slight in
c ve: Ase iy new custome rs.
: Q. Are those sales all co ntem plated: to be made hy the 7
present distributing companies? + cs
A. Almost in their entire ‘ty. The ‘patiiedite ‘prohi ibly. in-
eludes, and undoubtedly does inelude, One or two, small
a
.
Seeger meme
‘ 6. eee eee
distributors not ‘now connected te the. line who will Sub.
sesjuently be connected,
Q). And will vou name those? .
& I think now: peri of the’ Greentie id Gias Com
pany. J
Q. Any others ?: |
A. At the time the estimate was naib J .had in mind
also Richmoml Gas Company. Since the ‘estimate was
od ° 5 °
made, Richmond Gas Company. has. come on te the: lines »
and is now taking gas.
No, L-cannot name, spec ‘ifically, any more, but, un
» [fol 3211] doubtedly, there will be, as the years go by, some
small distributors not now taking gas w ho will begin taking
vas shortly. : 3
& tn other words, this estimate of “Other Indiana and
Ohio’? shown in Lines 13 and 14 did not contemplate an
very large new territory?
A. That is correct,
Trial Examiner: May l ask whither that: is, in part at,
least; due to the fact that the States of Indiana and Ohio, -
or these portions of those States, rathér, adjacent to vour
lines and the line of the affiliate as well as Panhandle Fast
/ ern, are presently served from local fields ?
The Witness: No, this did’ net contemplate that fact.
This estimate contemplated the fact, T might say, that-most
~of the eustomers who are within econemic reach of our
lines through those states are Now taking gas from us.
I beiieve the. local areas te which vou refer are, in a
iInstunces, too far away trom One lines to be se erved by us
anvway., : :
By Mr. L ittman:
Q:> Before going to the next item, I would liké to. ge
back. for a moment to the industrials in. Indiana and Ohio, °
- the: estimate for whieh i is “shown in Lines 11 and 12:
What Ohio territory is embrace d by your estimate of thre
rw al? ciate . ‘
There isn't hy of that outiaeate for industrial: ‘gas
+f) 321 } contemplated ror: Ohio. .:
> Q. Now, do vou have working papers in support of vour
estimates shoes in Lines 13 and 14 for other than. indus-
trial i in Indiana and, Ohjo? A. Yes. :
‘@
©
4x
-
a
*
ie x
ee, : te
haos ke
1028 © ae ee
a >
YY W hint ate the page Demberst:
A. Work: ‘sheet No. 6 covers that.
).° Aud you will submit that pase along, with the others?
| will he glad to do so.
Q. -Now, will vou please txplain your estimate: ‘divin
“in Lines 15 and 16 for Kentucky Natural Gas Company?
AL We made a eontract with Kentucky | Natural Gas_
Company in the summer 6f 1941. The contract is dated
‘June 27. The minimum provisions of that cofitr act call
for their taking 1, oy M. ¢. f. per vear for the first. three
vears, 2,900,000 M. ©, ~ for the next two years, W hich takes
us through 19da: iis
~
_¢ There was existe nt at the time of the exeention of this’
contract what we call a deficieney, a certain amount of gas
‘which they were supposed to have taken but had not Alone
so under the minimum provisicms of ace rtain contraét.
They oan in ‘othe 7 words, 140 — cubic feet short of. -
thei ir contracted: takes, so, in arriving at the Ke utucky Nat-
ural estimate, | was’able to follow what I thought was a
most logical precedure. Timerely used the minimum stated
in the existing contract, and ladded to it the shortage Ww hich
[fol 8213] they had left over frou other vears, and spread
if over a peasonable length of time of about two vears.
—_" =
‘Phat if about all of the supporting data -that fhe esti-: ”
tater h ‘for the estimat? oh Kentucky } Natural Gas Com.
pany, and I nught add that I think that 1 is at that was
. needed: oi ; re ;
Q. What Was the basis, of your determination of the
maximum day shown i Line AG for Renterky Natural Gas
Company! ° oa . ats
A. By Kernow ing, ‘as L deo, thijit. the \ have some ve ry good
operators Who are atteriipting to take this gas on an even
“basis, day to day basis, and after watching the deliveries
‘through our connection with them ard confirming: this, «I
felt quite assured that they* would be able to maintain av
“exeellent load factorthrough that connection; not LOO per-
cent, beeausé that is“alnrost. impossible ‘of attainment due
to fluctuations of pressure in the line, but | estimated that ’
_ they would be able to maintain. a 97 percent load factay,
that, is to say, that their ma .immm day-would not exceed
their average day by mere than 10 percent. ‘
Ny
-
_ indirect since April, 1939. -Our records -are. very coniplete..
; 1029
"4
Q. Do yeu know w hether ‘the contract with. Kentucky,
“Natural Gas calls for a uniform take? i
' A. The contract does not call for a uniform take, as I
recall it. It says nothing about. their Yaking uniformly,
Dhey are on.a two-part rate, so it is to their interest ‘to take
‘on_a uniform basis.
Q. Do you have wrething papers to. support. your
estimate? “ 7 ‘
{fol. 3214] A. Work sheet No: 7 supports this ev. ridence.
Q. You will submit that along with the others?
A... Yes,-sir. + © .°%
Q.. Now, that takes us “to the group that. youj have—
s?
classified as ‘*‘West*of Dana.’’ First, under. this class, is
industrial shown in Line .20. Wilk vou ‘please explain: the’
_ estimate for that class which | have just named and which
appears in‘Lines 20 and 21 of your Exhibit-40?
A. .The average figure over the years _ rather sub-
‘stantial, averaging about 14. million M. ec. f. under -this
sips classification. -Much of the gas we sell west oi Dana, and
when I say “we? this time, TI am really over in our own
territory, in the Panhandle Eastern territory aiid Illinois’
Natural Gas oe, , ee .
‘Much of the/zas, as | was saying, that is sold over here
is sold directly by. us to industries. . It comessright out of -
our line and goes-right ty the brick plant or the industry,
‘whatever it may he, and we bill the customer directly for
it. 9
About five-eigliths of. € is. sold to’ “Other Distributors
wha, in turn, resell it to industries.
The werk sheet which is, by the way, No. 8, indicates the
‘history, by months, of these sales to industries direct and
We could have. carried: it back to "1936; but we thought that
(fol. 3215] would be enough history upon which to base the
future estimate, so the work sheet shows the details from —
1939, by months, —
Tt indicates that for 1940, the sale was 1) billion; it
indicates that for 1941 and we had‘six months actual and -
we used Six. months estimated, will be wbout 14 billion.
w e next xo to work sheet No. 9 , Which is also a part of
this estimate, “showing the estimate’ for the future and
oo
/
%.
_—--
Sr
‘ ry
there, + ‘hate shown “on that work sheet that the sales for.
1944 will bee 15 billion ; $942—14 pillion; 1943—-14 billion
300 yiillion, attd so on, with a very sgrallaal air ase over
Se.
the years. Cruse : “eo :
I have not. ostinited any great increases in, that nye
‘tery, on the theofy that We are noW serving aldunal all
the inarket that is available, to natural gas pipe line.
-Q. 1 note that yout havi een increase of one million’ Me
ef. iy. 1942 over your 1941 estimate, w hereas,. in sulise~
“quent oe ‘through to 1946; vour increases are approxi-
“mately if tr five himdred ‘thousand M. c.f. Can you
explain thi YF ' aeet
“A. Dean. The rate of increase at present 7 sufficient .
tuation?
to jastify, in uiy-judgment,.an increase of one million M.
, 2 ‘ . - \ .
c.f. begveen 1941 and 1942. Past history supports that.
Now, as for the future, I do not see anywhere in the ..
territory’ justification for assaminghat the rate of ins
crease Wil be as. rapid as it has been in the past.
‘The ‘refore, the ine rease ot 1943 ever 1942 will be con-
viderab ly less than 1942 oyer 1941. Its just a matter of =
| fot 216) having the business there.
~Q. Are. the, sales’ ‘shown in Lines 20 and 21 to the in-
dustrialy west of Dana. for all of the vears shown.in- Ex-
hibat 40, sales to presently cornected cabclises or, does
your estimate. iia a sales to othergepstomers as
well? | we ; ~
A. . Almost jn their, ‘ealivety, I would say us much as’
5‘ percent ure ty he made to prese ‘tly connected custo-
og mers. You can see that the imereases, as I have, shown.
“down through the vears, are very modest: , . \
t
Therefore,: vou would naturally judge from this that
thore isn’t xoing to be a great increase Ne thie number at
new customers. . EF suspect, sitting here studyinig this esti-
‘mate, that it ds foo conse rvative. We aaa
Qo Will you baad the work papers ‘for this Intter
estimate, please; which are, | believe, Nos, S.and 9? ae
A. Y&s, T wall be glad: tv.
\). "Now, that.leaves one more : ae that is the ide:
“tie and cammercial sales west of Dana shown in Lines, 22
sand 23, Will you please explain the method followed by
you’ in arriving at these estimates ?
i ° -a
OT ates.
& -
. : ace oe 1031
A. That isa sienmnalliea estimate. to the one that we
have just Kscussed. We talked about the industrial west
of Dana and now we come to ihe domesticand cominercial -
sales west of Daya on the system, of Panhandie. Eastern |
Wand Flinois Natural Gais Company, main line only. '
fol. 3217] ‘© have’ in ¥ votes and TI shew: here on
the “work sheet, which is the salgs which we made
te that class of bysiness os 189, and pado, and it is
noted that the growth per year ® ‘about 500,009 M. ec. f. T
~ do nof see, ahead of us in that territoty any rapid. expan-. |
sion of our facilities or any large cities to be added other
than, I might mention, Bloomington and Normal and
Galesburg, IHinois. 2
°
As I say, I do not see any gre: ut. expansion ‘ahead of us, its
“so I have merely estimate x flat Merease of appyroxi-
mately 500,000 M.c. f. per year. The supporting Statistics
‘are a little more in det dil than: they have been on some: -of
those estimates: farther to the east, as you will note from’
the work sheet .No. 16, probabhy due te the ‘fact that we
* have at oue finger tips there in the Kansas City. office
considerably more data ot the characteristies ‘of these
sales than we do-some of the sales farther east.
My: work: sheet ° ibbws that I estithate thie éustorrere to
increase from 145,000, which they are “approximately at
this time— +. a
a ie
3 Mr. Culton: - *( lnterposing) You mean the es
. of the distributing company?" SSA 2
The Witness =: The éustpmers of the distributing cony a
panies. From 140,000, instead of 145,000, from 140,006 as.
they are at. present to 145,000,5 190,000, 155,000 ard SO ony
ittereases of about 5,000 cfgtomers per, year which is.
&
--pargly “a judgment figure, and I beheve that is all that I .
have to. offer unless. you have specific questions, on that.°
: {fol. 32 D18] By Mr. Littman:
Y). W hat are the work sheets for Lines 22 and 931 f
~Y A. That-is covered. by. work sheet. No. 10.
Q Will you ple ‘aseesubmit that along with the others?
‘Yes, sir. ; ig a ge nee
a Ref ring to the lin@s which are ‘ed Max- tn in
Exhibit 40Hre. the: amounts shown in those lines the ac:
<
o : : 2 > : >. .
. *
1032 aes Meee Sy eee
tual maximum: - day “expected. for each class, ¢ or dee: it -
merely represent the contribution expected by each class
“on the expected peak day? Which is it? ayer
cs A. The-record I am quite sure is clear on that aiid
hecanse-of direct examination I testifjed, and I am re-
peating again, the maximum days. shown on this estimate
ure the contributions of the respegtive Toads to our sy stem.
Q. Did you make any estimates of the actual peak loads
to” be expecte ‘d for exch class? -¢ °
A. “No, I dealt strictly in ternis of the contributions on
‘our,maximum day. P : ,
0. “Naw, do you have ‘any further working papers .in
support of your estimate*shown in Exhibit 40 which we,
have not called for, Mr. Morton? -
A. I made none, These are the, only working papers
which I-made, except, ot course, scratch sheets upon which
l made additions and threw in the waste basket.
{fol. 3219] T purposely. retained them all hecause I knew
you ‘would want to have a good, clear record ot what was:
done-and how it was done,
QQ Now, Mr. Merton, in your judgment as rate en-
vineer of Panhandle Eastern Pipe Line Company, do vou °
expect these Sales shown an your Exhibit 40 to he mide, in
mre in the. y years 1941 to 1946, inclusive! Pas
9
A ° a es, ‘| do. — ‘ ; ec eae
q. And, in your: judgment, this estimate is conserva-
tive, is it? ; i, .
A. No, am not going to tell you that. This is right
on the nose, gs far as I know. It ts not conservative nor is
it the opposite. 1 think these are exactly the quantities
that with be sold. eee aa ned
Of COUT EO, when I say ‘texactly,”’ you, understand what
Tt mean: “That this, is exactly’ my estimate but that, of ©
course, that they may be wrong 5 percent one way or the
-other or 10 percent.
~Q Up or down?
A. Up or down. tee
«): Me. ‘Morton, I believe you testified on direct exam-
‘ination “that vou: had prepared this estimate originally
‘for the purpose of ‘advising: the management of the sales
thgt might reasonably be expected @p the next five years.
Is that a correct statement?
xX
yi
[fol S221] Q.-. Have vou, at any time, made any estimate
| ee ee oe! 1033"
. {fol 3220f AV NM reeall very well, and I améglad that yon.
_brought‘up that subject. eo et &
The inference of the question, although it did: not show
ithe record, the accent upon the words when the question
was asked me, left the impressiou in my mind that the in-
terfegatbr wishtd to know whether we had Warped, this
estimate for the purpose of establishing some yoint before
this Commission and 1 hastened to add that the estimate
had been prepared—I ¢annet recall the exact words —but .
I denied that there was anything special about it.
_ Now, I-.would like to make a coniplete statement about
this: This estimate is made in re sponse to a request from
the management to me. ~'Phe management requested me to
make this estimate: knowing: that this rate case Was coming
ip.” ss
‘They wanted me to set the dures dew un in my own, Way
and as honestly as, f could, those were my instructions, to
make an honest, straight-forward estimate of the sales
for ten years hesamac. they said, ‘* We think we are gorig
‘to need it in this rate ¢ ise*
That was the we ay the assiguinent came to me, long - fore .
we had made our plans as to what our defense would be in
«this ease, at one of the early meetings, ° SO I sat down and.
I stagted building up ei estimate for # ten-vear period for
use in this rate case. |
e
of the revenues. expected to he derived from the sales
‘shown im, Exhibit 40? .
A. 1 tad no OCCASION | tu, do : sO, and did hot- do so,
Q. Have you made any estimate of sales on behalf of
the management with respect to future vears.
A. I have not had occasion te advise the management
except in so, far as 1942 is concerned. I have, within the
last few weeks, prepared-ount budget for 1942 of the sales
that Weexpect fo make, with the revenues.
(). In ether words, you have an estimate of the 1942
revennes? A. Yes,. 1 do have.
@. You do not have suc h an estimate fer 1943?
A. .- No, I do not. ae oe
.
—_
™
1034
e é
. | presume your le estimate. of revenues is predi- 4
eated on your Column DSn Exhibit 465, is it not, or some- a
thing cose to it? |
A. It Sretty closely approximates Colina i= p. —owane ©
hibit 40. IWas a little surprised to find.out. how close it }
did come, having been made four or five months after this -
fol. 8222] one. You understand, don’t you, that if T would -
‘ake another pstimate today if would necessarily be dif-
ferent from this one that we are looking at.
Trial Examiner: Mr. Morton, may I ask whether the
company has maintained an active sales premotion policy aM
during receiit: vears throughout the territory served by ‘
Panhandle Eastern? - nae , : ae
The Witness: Mr Examiner, that is a question that ;
voes to management. Tight just tell you what I think of é
it, though, sinee you have asked meé, but I wish you would -
please understand that there is alw ays danger in a rate. aie i
engineer's testifyyng for the manigement’s palicies, :
We maintain, what I pMfsonally think is an active new: i.
business policy, That is merefy personal opinion. [think — ,
that we work hard at getting new business.
ee
Trial vesbaas: Is.-that true throughout the uniliant i;
In other words, do you try to pick up.industrial and eom-.
riercial customers wher Ver possible throughout ‘the SVSs-
tem ?. ee :
The Wittens: Yes, we do. Wa. work at that thing,
whether it is on Panhandle Eastern property or some. of ba
the distributors? property.
“Trial ;Examiner:. So, that, vour-answer to my question
would be that vou have maintamed an active giles promo-
tion policy in recent years !
The W itness : Yes, sit ir. ou ee w
V
?
Trial I Xi iminer:; Throughout the system
°
| fol.- 3293 | The W ityess > That is iny Opinion.
e * “Se « New
Trial Examiner:s | was going to simply ask again the ;
question that was pele yesterday, whether your estimate
of future sales’ contemplates the continuance of an active
sale ‘s promotion pee ¥ throughout your system,
e - ri
x 4F
2
Lissa
The W ithess : Yih it certainly dloes. Now, when you tie
that to my estimate, @vhy, 1- feel a little bit better than
answering to these ‘poliei ies about the company.
8.
Trial Examiner: And your estimate contem plates: Ww hat
?
you - consider the maximum safe estimate of expansion
based on‘a continuance of present policies? vg
The Witness: | Yes, it does.
Trial Examiner: And it takes into account ‘alae, the |.
ability of your company to fill the demand if your estimate:
is correct? . ; ‘
The Witness: Yes, it does.
ie * .- * ae ae e e
\
By Mr. ‘fittman: . U~
Q. Mr. Morton, I believe you said if you were making
this estimate today you might Jhave a different result.
“Would you expect ‘the: result to vary materially from thet
which you show in Exhibit 407 ‘ 7
A. I would not. Some of those years would. be up and
{fol. $224] some down, I suspect. IT know sopite of ‘the ac-
counts ‘would be up and some, down.
Q. But over-all, it would remain more or less the same?” -
A. That is true.
Q. Now, how did your most recent 1942 estimate com?
pare wifh that which is shown in Colin D of Exhibit 402
Was there much variation up or downf' © :
oA. There was not ovex.3 pereent variation up or down.
“). Was it-up or down?
x A, It wasdown. Some saies have not “‘materiatized tis
rApidly as [anticipated last August and the r reason is quite
apparent. Oar inability to get shipments? pipe is going
to delay us bevond the period when I expected that we
would he: able to start making these sales up there in
M an shown’ on Linés 5, 6, 7, 8, 9, of this study. ,
\ é ° ’
That “Michigan ‘situation has moved back six aunlics. I
, would say, due to out inability ‘to get pipe shipments. ee
course, at the time [made this, things looked a good dea
rosie r. As Tsay, it was e: irly August:
Mr. ¢ ‘ulton: That is “30. faras getting pipe is conce ened! 4
The Witnéss: Yes, sir.
9
- .
3
wae Cae. ¢ aie oa, ge
- Mr. Culton: That is what. you mean by *trosy’"?
The Witness: Yes, sit, that is what I mean by ‘rosy? — 5
by Mr. Littman:
4). The picture, #1. so far as it concerns. the sales
{fol. 3225 | yas still looks abo ft: as rosy today or more -so
”
than it did before?. A, It does. Se Sawer ‘
* e -‘@ .* ‘ *. : e . * ; be :
[fol. b2grt By Mr. Littnan: SS see
Q. L.will ask you this; Mr. Morton: W he ther or not you _
“have at any time prepared any estimate: of revenues: for
- the vears 1943, L944, 145 and 1946, or any one of those
years? ‘ :
A. 1 honestly do not bois whether L have done sp or
not. Now, Mere are occasians, as you know, when
“requested to makewup this kind of-estimate or that kind of
estimate. "Phat is ‘my business, this estimating. e oS
I want to say this te you, that ors I is note xistent in my
office, nor lave Lmade aiestimate that you conld put along.
side of this*one here and compare it with this one.
‘Tn other words, vour quéstion, and I have heard it before,
sounds like you would like to know if T have made estimates
asa regular routine thing for the management to keep
‘them advised, ita form about like thas, for three or four”
Vears— . - ,
(). (Interpositg )- ‘Setorcine to Exhibit 40?
A. Ye s, referring to x shibit 40, for three or four years
it ay advance ‘. We de not TALTY sucha thing. We. only work
one vear in advance. That is all weneed to work, one year
inadvanee. <, wg. eae 2 . : ey US
, Now,every fall, as Lb have said before, we go to work and
Wwe prepare budgets covering the next year’s work and we
prepare all of that stuff Tn detail, hut we' do. not have an
{ fol. 3228] estimate anywhere inthe office, nor have we
2. ever had, so far as [ know of; anything like this that we
are talking ‘about, this -Exhilit 40 and _ its supporting
papers, > es
\- Q. Well, T was not nevessarily re ferring,. Mr. Morton, .
te an estimate that you could hay side by side with exhibit
No. 40 and. say this is the revenue for this, that or the
ae
toa
a bait 5 has le AICS ih ERE OD
AA ARIUS SERN AO
.
\
a
ee -
ne
Sy ae
other class’ Lhad-reference, when I refe rred to the years
1943 to 1946, inclusive, whether you had submitted ANY =
estimates to your company of revenues to be expected in
those vears from sales to, for ‘exatuple,. Consumers; Power
Company or this, that, or the ether company.
~Have you week subinitted such estimates?
A. 1 lave submitted estimates to. them covering Green-.
field and Bloonsangton and, Galesburg—for-three or four
years in advanee,tittte, individual projects like thaf.
eee, on this Consumers P ower, I did not make up any
other estimate myself on Consunfers. Power, but an
estimate certainly was made-up on C onsumers Power and,
as you see here; from omens Ww ork sheets in my file.
'-T have looked at it. I do not know how. many vears in
advance it is. * *.* Te answer your question, [ knew of
no estimates that Ihave made around that office for future
years for any project except the smaller towns like those
I have mentioned. aie :
[fol 3229] Q. Mr. Morton, vou could estimate, could you
‘not, the revenues expected to be derived, by Panhandle
-Kastern and subsidiary company trom the sales shown in
Exhibit 40 based on’ present rate sche dules, could you?
A. I could.
° le . * ° *° «€ *
{fol. 3230]. Trial Examiner: ‘The Trial Examiner has-sev-,
eral times wondered exactly: the \field’ the Defendant. has °
opened up by asking for inclusion in the future rate base
the estimated cost of future: vonstruc tion and future hetter-
ments. :
-sS
[fot 3231 }-Mr. ¢ ikon a teedinns r, at the proper time
©
‘the Defendans, will not insist that the’ future construction -
which will bet required to produce additional volumes of
sas is necessary for consideration in determining whether
or not the present rates are exe essiy
Ja
It will insist that the addi sonal, costs required to —
duce and transport the same volumes of gas now being
produced and -transported ase matters that should be.
taken into consideration in detefmining whether .or not
the. rates are excessive. . a
ce
nae PAE Sh te
lt es < tike-the. position, and will take the position at
the proper time, that the future capital expenditures re-
quired for.the purpose of producing and transporting ad-
ditional quantities of. gas are*necessary for consideration
of the Commission in determaning the return which .the
‘Defendant company, should be permitted in the future in
order to attract capital necessary for the making .of thea.
additional expendityres. oy
&
Relating this case te the Chie “ago. case, 1 point out ‘that
in the Chieage case the line was:already loaded and the ;
future capital expenditurés were not expenditures for the
Ce
purpose of producing ad&tional quantities of gas but ex-
penditares -required for the purpose of carrying on. the
then-volume of business, and that is the contention whth
we make in this.case, that in determining whether or not —
the present’ rateS are eXcessive, the Commission Should
take into consideration the expenditures which -will be
preggers in the ‘future .to produce, transport and dispose
[fol 3232] of. thé same volumes of gas now being handled
and that the eapital expenditures réquired ,for additional
volumes of gas are for consideration in determining rate -
Sof retarn, as such. That is, the number of dollars. we are
going to be required to Ko to the public for and get in the
future. ;
Mr. 1. ittman: If your < please, it seems to me that —
the picture Mr. Cudton paints will be incomplete without
the Shi with respect to The revenues to be derived from
- these increased sales. ; a.
°
. oe « ° . ° ~ e
foal. SE83) OO} WW, Morton, the witness under examrna-
tion at ‘the time of the taking of the noon recess, resumed
the stand and testified further as follows: | a
3.6 a"
Cc ross-Examination—( ontinincd.
°
°
By Mr. Littman:
o.. 7 helieve’that at the noon recess I was stating the’
re ‘asons for » request whieh I made of this witness to.
‘supply, first, lis estimate of revenues to be derived from
sales of gas shown in Exhibit 40, which estimate, accord- _
ing to the testimony of this witness, was preparedyand is.
s.
&
. By, Mr. Litfman:
SF
1946, inclusive.
& fo Pen a
it to thé-vompany as his estimate of revenues for the year
in Pa and-is in’his office, and“he expects to submits
}
.
1942 4xecondly, I request that this witness snbmit an esti-
maje/of.the revenues expected by him to be derived frony-
sales of gas shown in. Exhibit 40 for: the years 1943 to
* . 6.5 . e 1 2-.8 ‘*
(fol. 3234] Mr. Wheat: The gross revenue which will re-
‘sult from the application of the figures shown by the wit*
[fol. 3235] ness in Exhibit 40. for .these respectiteyears,
based-on the present rate sc hedule.s Bs
_
* + * . * * * @
A. On this exhibit I have pl ted cost of gas plant
agitinst total annual sales on the Avstem; the. scale apply-
ing 40° gas plant reads in the millions of doflars, and the
Seale’ applying to annual Sales is in billions of cubic feet.
“a will he noted -that, the sales over the past three years
have increased at the’ Re of approximately 7 billion cubic
feet per year. si -
The only significance that. | personally .anr able .to
draw from this’ is the fact that in. the light of the perfor-
mance. of the. past few ®ears, the wee for the future,
With respect tovannual sales in M. e. f.-is not out of line:
In other words, Gur past performance indivates that -we
i fot. 3236], have \been growing very rapidly; at the rate
‘of about 7 billion cubic feet per year, and this detailed
study of future years, this estimate of mine, Exhibit No.
40, shows about that same growth, so that i is about the only
significane ‘e that d attach to this Exhibit a
Q. Now; what is the source ef the ii for the curve |
“(la
s Plant—elassified?”’ °°
z That is the book: records of the company, | and the
Statistics gupporting that ciirve are shown in one of Mr.
Watkins’ exhibits. If have merely. plotted some of the fig- -
ures that hay& been hitherto. offered 4 in this ase.
Q. L-wiil hand You a copy of Mr. Watkins’ Exhibit 52
and ask you whether page 2, line 38, of that exhibit, en-
titled: ** Total Gas Plant—classified,” shows the figures that
you have used for,that purpose in your chart, Exhibit 41.
8 * P .*.-
°
i
pe a ee i ‘ CO.
1040: \ 5 ee
A. They appear. to be identical these appear to be the ¥
: figures I used. oe
Qe "In ‘other words, you can't “tell from the: chert ‘the
__-éxact dollars nearly so well as you can from this exhibit?
fig © A. That is correct; for all pene purposes these
7
‘ are the figures.) .
Q. “Yes. Now, are the figures representing the curv e
‘Annual Sales’ the mad as those appearing in column
. *Q” of Exhibit 58; and hand you a -— of Exhibit 58? .
A. They are. ¥ |
* Ta Se <.38 ° r Oo Oe
.{fol. 32371 Q. Phe Examiner has ‘asked you about. sales:
promotional. werk, and | would like to ask Qqw addi-
tional gyuestions. with Respect, to that: ; -
Now, your company sells only to utility and sspecial in-
| dustrial compan, ; does it, not?» =
\, | Yes, that’is pa, ; ie bee: ra
aaa on’ ° ° e ” ats . Be
“| fol. 32: OF ‘QL W ell, "you expect ted then a vigorous & sales
prqunotional activity fo get the results that you set out in.
Exhibit 40, did ¥ou not?
* Nd
* a @ e _* e @ e
; : ;
A. (Interposing) I expect some-of those results will
come about without the necessity or, without the assistance
ema Se es eat
of a vigorous sales campaign, but I believe the total would ae a
p pbe achieved nly through it, and that is what L. way re- oe
) ferring to; the total would be achiev ed only through somie i
vigorouS¥ales promotion n policy. = Lee Teen het Sa
° ‘ ee e “e a e oo, “i -?~-
fod: 40} Q. New, dows that sales promotional ‘depart.
ment spend its time soliciting and adding new business or 7
in retatging its old ‘business? - *
A. Uyy sales efforts are directed to both: we have no.
sales department as such, sé I can’t answer your question
as respects a sales department, bnt the promotion ‘efforts
~~ ef our cémpany are directed along *he lines of retaining the
old business and adding new custamlers, * : 7
(). In-alloeating that expense, however, you have allo.
‘cated all of@t to unused eapacity, did you not?
s
AS
‘
%
ad : '
;
ioe ; . o:
‘a
ha]
) ‘
a
pre eee ae
A. In this unused-capacity study, I regarded sales a
- motional expense as just as much an expeise of doing bus!
ness as any of the other. expenses, and I did include it in my
caleulation. of operating expenses. attributable to. unused
‘apacity, but I didn't, use. the entire amount in the. final
answ er. ; ' .?
{fol. 3241] Q You didn’t use the. entire atnoant? :
A. No. | started with the total amount, but when, you © ne ae
finally come thronsh to the-final figure. which: appears aw: i v
ever on, the right-. nd column, around $5,000,000, only a
_ fraction of the expens. “ttzibatable to sa es eS finds: .
its way into that figure. ee
Q. . What UT pROrsON, then, finds its way, into the final:
"figure? ae ae oe £ ot eae
A.. I would say very close’ ‘to 50 peréont, deduce those ,
early vea¥s. In other words, I say by this study of mine, 4
aging the. 1938 unused capacity, J say that'in my opinion, - °°,
in the opinion of the estimator, that 50 percent ‘of certain
operating expenses during aN these early formative years”
‘was attributable to waused capacity, and in this expense is
listed What we re fe ‘r to as business ‘promotion.
eh. Now, I take it that ydu_ feet it would be neéessary -.
- for a distributing gas utility To maintain as sales, department ie
‘just the same as_your ‘own? eats . SM ee
= ‘Undoubtedly that is true. © - fas ,
. Aid that results in a double ioading on the public,
Ow ‘- gas consumer, does it not, in that thefe is a loading
ofexpensé in which you seck to promote sales: to the dis-
“tributing utility, and again’when the distributing utility
~ secks to promote sales to the public: Is that correct? . ee
/. As’ I think Iswould object’ to the use of the tern) ‘load-
fol. 3242] ing on the public.’ Tn all business ihere is ex-
pense connected’ with its operation, Yhd we all know that. on
. the public.finally bears the expense of running a‘utility, in . :
our case, and in your case in Detroit the same as in our line; ee
so I think it is a littlé unfair to ask a man to: testify, that
we.are loading‘on the public soma double charges becanse
we maintain sales promotion efforts in beth our transmis: 7
~ sion lines and im our distribution efforts. Tes.
> Q. I am asking you just the plain faet whether or not | :
that constitutes a double | ‘charge, or arte on: gas con- .
sumers for sales promotion. - 3
0s :
ee YY 66 12,466 es =
:
* 10g2-
4
e. Sf - a
Z ® 2 ” e . °
cs
A. Lhavee xplioned my position ait 1 think’ } mind my
“unswer clear tothat question, >
:
. . . . ® « ° e
**
o
| fol, 3281 | By Ar. Chamberlain: “S
un Now, referring io your Exhibit: 38, you spoke of at-
iting to ascertain the Gost of the unaséd capatity in the.
main lin® What‘did you mean be that?! - :
* AS EL theant. by that, that if my judgment, there was a
period during the operating of this pipe line when it, was
operating at considerably less than its designed capacity or
. the capacity for whieh its [designops] had built it; and that .
it cost the eqmpany some out-of pocket money to carry this
unused capacity ever. what | hage termed ‘the lean years. _°
and ghat these costs; consisting of actual out-of. poeket in-
terest, ad valorem taxes and certain operating expenses,
i re incurred hecause of sueh unused capacity and I at-
culation on five: different methods ag-to What’ those
attributable to unused capacity should he.
Q. Igt me’ put it this way, or Jet me put a questian this °
way. é the letter which yon directed to Mr. -Nenner and
“ hieh you read into ev idence vesterdgt, vow suggested that,
in arriving at going value, recognifion should: be givento.
the fact that the company had, during its early vears, idle’:
capacity, and: now JI quote :4 **which-has been made in ad,
tempted in this study, of course, to make ‘a mathe uation oF “3
sts
vance of the’ time when it was.to he used because it. was <
economical to do so.’ e See ern . yo?
Now, will-you expand on ilit a little bit and give Ug your \ :
ffok 3282 ] rattonalization of why vou should have an allow:
ance for theaunused capacity of. the transmission line?
¢
eo 4 think it.is quite clear Mr. ¢ ‘hamberlain, to all of us,”
andl think ‘yot probably "have. heard Mr. ‘Biddison explain
* this same thing, that it is impossibly to build what we term
a “rubber pipe line?’ that would expand witM&the increa’
_ing markets. . on tee
a” ?
It would be. uneconomical to build a 4 inch line to carry
‘the first vear’s business and an S-inch line to carry the see
ae © ond vear's buginess, and so One , ae
Ss
The designers of this: ‘pipe line system appawently eX
"Peete to vet a load that would: Fully bs af pipe line pf 4,
o * ?
~
*
a : "sei ite
¢
°
J Peet errata ) ; oe ‘ ss Fe ag +1043
2 and 20 inch cagadity so they duilt one of that size,
expecting to fill it with gas because it was economical to *
build a pipe life that size. ) ;
They only pot three compressor stations on it, but it was’.
designed for 11. So, during those early years, when it had
those® three compressor stations on that size line, it had a
capacity of only 80 million etibie feet. /
”
. That was all the gas it could tarry. Later ny whet tier oe
poe the full comple ment of the compressor ‘stations, it
had a capacity of 125 million. *
a
New, iy) that interval begween the time they binil that line ,
and the.time it-started carrying its fall loadl of 125 millien,.
thére was some unused eapacity in the line and it was
[fol SIR!) the cost of carrying that unused capacity that
a! tried to measure here in dolla rs and cents. .
.. ‘4 \ > eee BP)
° , + * * ° S.\~ 2 * . bad
t ar
q. Well, ts it fair’ to say that. you -are approaching it we
fromthe standpoint of a distributing electric utility which —
is building a large power plant and over-building. for. the
present time ‘to take cate of what would be. reasonably an- .
ticipated for its future needs? 7
A. Well now, there are somp points of similarity. in
the two thongs, but there i is mor¢ flexibility in the ease of.
the power plant than, there is* 4 the case of the- thing we
-. “are talking about.
J «They can expand graduaily as the load comes on. They
, tio not have te install all the capac ity needed to carry their
) final load at the outset.’ There is some ‘similarity, ves, but
i | fol. 3284].the degree is considerably different, as Tsay. __
‘
@-
- o *. a ‘@ a es @ 7
. " a °
[ fol. 3291 | (): “He: Morton,. what is “the relative capaerty
of a pipe line,. let Us SiY- One twice the diameter of the |
* other? “4s . ;
o” ‘
iy. ty e ° a e © _ * . .* «6
[ fol. 8292 | The Witness: -I think Mr. Chamberlain means:
what is the carr ying capac ity at certain pressures or at any
given pressure ina pipe line, let us say 2 inches as com-
* pared with one having a diamete -r of 4 inches. bad
‘
‘
Pea aw ries } <°*
;
ie
~~
ya
By Mr. Chamberlain: | ; ey 2
( “¢ Yes. .; ; ; ° ~~
A. What is tlie ‘relationshig of diameter. te. capacity:
‘Now, I cankot answer that frgaa memory, Mr. “Chamber-
‘Jain.- | gould tell vou this rifeds, Xt it is not a very hard
joky but that it would probably take WE) minutes, mavbe,
for’ me to work out.enough-dnformation to satisfy myself
that 1 had answered that correctly cage Weymouth’ s For. 7
mula. ales ’
wv
The cz pacity of tins pipe ae: Varies, not direetly arn eis
diameter, but’as séme, power. of the diameter ‘and, for the’
moment, the power has escaped me, but T believe it is the
richt-thirds’ power of the diameter so that, if my oer:
tien ts*correct, then the pipe line that is twice as latge.a
‘the other woul l earry 2 D to the,eight-thirds’ power—well, 4
lfol. 3203)-it is disenéter to the ¢iglit-thirds power a's ‘com-.*
Rs pared to thé-other diameter-to‘the five thirds power.
* aa ° ‘fe am a a 2
a ee right: - Ww hat Tam trving to. get teat is, ‘there is
An eeDnowyY ated: ‘a Very substantial economy, aif vow were
soing to devel op the given capacity, by baili ling one large
Inain tustead' of two small ones w hic h would afford vou: the
saine capacity? 4 > are
AL Yes, there is economy: in building ‘the larger pipe
line, of course. eae 2 °..
3 PY ‘
Q. “You were cussing a rule-ot thumb hase yeiterday,
Xow, von know. the rale-of thane by which these .naturdd
_ pipe lines have héen projected and. talked abont. What
haé been used in the industry as | a} example of the cot of
* building apipe line per inch of diameter per mile?
A. Tain sure vou are oye raking of the $1,000 per inch of
diameter
{ fol. 3094 | Phat is right. » Then a line ‘ line’ lee
* that rule-ef dhamab would cost about $10,000 a ) mite, is s that
er « eS
“Yes, under fat rule, that is right.
& Whereas .a 20- inch Hine: would — about $20,000—a-
mile? A.:. Yes. Sete Ss
Q. And _ the one would sine, to be very careful, ‘three to
igur times the capacity ot the other one, wonld it not?
A. Ye es, sIr, correct. © - mee
“a . ° a7 py
e * oe * *. a e
5 et Oo ’ ;
‘ \ i]
Fee i 7
o
(tol. 32 95] Q. if you had’: a ‘Sami of 40 million feet of po
a day and you w anted. to-build a pipe line with a capacity
/ Xcess capacity?
A., It would depend entirely on what you Gseten to .
: muke it, whe ther you wanted to approach it on a straight
proportivial basis or on the inerement' cost hasis. There
_ dre-arguments both Ways.
° * a a _* Se ae *
A. Now, that Tecannot Say because I did not go, as: 1 say,
‘into the individual accounts that/go to thake up this story. |
[°just tackled if;from an over-all standpoint.
Q. “Don't they have a standalrd: right- of- way for tliese
“witural gas pipe lines?
A. IT guess Tsound dumb, “bu i dow't know that.
~°.'Q. You do not know that, buf, supposing I put this to
vou and see if you know this. w ould it require a wider
.Yight-of-way fo lay a 24eine h main than a 16- end main?
Ac I do not know. - . “ ~ -
®). © You know you have paralleled your lines in many ;
cages On thé same right-of-way that you had to start with?
A. I know we:have paralle ‘led the’ ling, all right, but I.
ito" not vi cche about. ‘the right- of-way- arrangeme nts.
@ ° 4 * a * ihe. 3 oe
7] - .
¢
| fol. 3303] Q.. Now,.1 understood your. testimoriy yéster- |
day that vou were attributing-te untised gapacity, let us say
just abstractly, a5) percent of the veneral and administra-
tive expénse cove ring the lo year r riod.’ Is that in gen-
eral right?) = ° > :
[fol. 3304]. Tn a cal that j is true,
).° Now, cate “thai state what IT utidérsteed, will vou
- State’ again your ‘reason for alloeating that proportion of.
“city?
is)
the gene) ral and adqinistrative expenses to, unused capa-
is That ¢ goes back to the entire conception of what the
Study. is for. © | “ -,
(. You are talking about your study ?
of 80 million, what, heirs of the vost would, be for ‘this
i fol. 3302] Q. All right. Now,/land rights and land, did:
you buy any greater right-of-way than you would have, hed
you hid a line of half the capacity?
<6
a
—_
.
1046
A. “Yes. As'l uteds many times before, we built a pipe
. -line which was intended to take care ef a certain load be-
cause it was economical te build-a pipe line of that size.
Now, during the early: years of the project, it did not
carry the load for which it was designed and We five dif-
ferent mathematical ways, I have indicated what percent-
age of the preject I thought was’ not being, ased during
those early years, and I attempted, by. use of those per-
¢
centages, to’ arrive at what seemed to me “to. be fair meas-. -
-uressof the cost of ‘arrying unused capacity, and those
costs consisted of inte rest charges, ad valorem taxes, and.
ope rating: eXPense:
There may have. been othe Ts, “hind those are the only three
that | used. a
The reasoning generally was this, and“ I am, getting™
closer to your ueestion, that since there Was, let us say?
ay percent unused: capacity in this: project during, let us
say, 1934, then it followed ‘that 50 pe reent of the expense,
&>
of ‘runming this’ big project could be alloc ated reasonably”
[ fol. 3305] to this unused capacity, ‘
Of course, we did ‘not take 50 percent of all of the oper-
ating expenses because. we realized Yhat some of them
would cause asgood deal of argument if we put ther in here
and it would be a little difficult to justify something that,-
right on the face of it, had no connection with unused ea
pacity, sy We tI pew out Some of b@m bat, in general, that
mac fe
*s what we did.
| Since we had O07 ggreent unused capacity during those.
years, PT took oG pervent of certain operating expenses as
having been ine ugred on “aevount of keeping in running
shape this pr oject. Ee
\
(). - Weill, vou ‘took the 50. percents of veneral cand adinin:
istrative expe nses, d-vou not? ; ‘
a
-—. ae 506) S ae aeat : :
(J.,.And that was on the theory that you were staffed
with sufficient ‘employees: to operate a plant transporting
its full capacity, is that right?
A. [-denot know whether that exactly applies or not. I
think about all we ‘could say about that is, that since it ap-
/. peared that 50 percent of our capacity during those years
§ =e
‘that score throughout
es ; , a «
; 1047
was not being used, then 50 percent of our expense during ..
those years was there because of unused capacity.
Q. Well now, let’s apply that a little more. concretely.
That includes the salary of the president, does it net?
A. a undoubtedly that did. "
e 7 eo .. ° * *. - * e.
;
[fol 83104 Mr. Littman: Mr. Txcéudaie, in accordance
‘with our usual policy of endeavoring to clear up the situa-
tion with respect to-exhibits as each witness completes:
- his’ testimony, I would like to make a‘statement with re-
“spect to the exhibits of Mr. Morton.
W e have no astocdina: to Mr. Morten’s Exhibit, No. 40,
‘Estimated Main Line Sales, Years 1941- 1946, Inclusive.
We have .no objection to Mr. Morton’s Exhibit No. 41,
Which is a chart entitled, ‘*‘Panhandle Eastern Pipe Line
Company-and Subsidiary Companies-Sales and Gas Plant
‘by Years’’. ~~ , +
We do, however, renew our objection to EKhibit 38,
which was submitted by Mr. Morton. I have stated on this-
record the basis of our obje ctions to Exhibit 38. Briefly, to.
reiterate our position, it is sitmply this.: a
We -objeet to any evidence in this proceeding relating to
‘a separate allowance for going concern value. We believe
that such a separate allowance will not need to be made in
this case se, in the’ —— we reserve our objection on
1e entire proceeding. | :;
Secondly, the evidence submitted by ‘Mr. Morton cannot
congelvably furnish a proper basis for going coneern
value. As we have already stated, the exhibit simply un-
dertakes to allgeate a portion of past operating expenses,
[fel S311] and past taxes and past interest to a so-called
‘total which ‘this witness calls. ‘‘attributable to mnused ca-
pacity.’? ° ° ifi¢ 2
This so-called capacity has -no relation, in our opinion,
and T believe in this witness’ opinion, to. the. physical eapa-
—etty of this pipe line system. Et includes expenses which |
are obviously unconnected with any “unused capacity’ of. the
pipe line, system,
\Somie of those, as your Honor will recall, are distribu. .
tion system expenses ineurred in connection with the opera:
tion of distribution systems whieh are not even now ow ned
by Panhandle Eastern” Panhandle Pipe Line Company. ©
.
They include the cost.of reading meters in eommmnities
in Kansas and Missouri, the-cost of repairing services and
mains, the cost of advertising; the’ cost ofgsoliciting cus-_
tomers. It includés an anascertained. amount’ of interest
paid by a number of subsidiary companies whose opera-—
tions had. nothing to do whatever with the.operation ‘of the
main pipe line system which is the subject of this pro-
ceeding, re of
°
But assuming that all of those expenses were proper and
could be capitalized into a rate base under the guise of go-
ing concern value, we believe that the evidence fails to sup- .
port the method weed ky thi& witness fo arrive atthe
amounts, properly applicable or attributable to’ unused
‘apac ity. ’
; ae
Those, brietly stated, are the°groutds for our objection.
Weobeleve that this exhibit, namely, Exhibit 38, should be_
(tok 3312] excluded. if
Trial Examiner: Some reference was made yesterday
to further data that had been requested of-Mz. Morton and
I would like to know whether-the data, which, I assume
have not been furnished, will have reference to Exhibit 38?
Se e e
Mr. -Lattman > -Those data will not. affect Exhibit 38:
Those data relate to Mr. Morton’s Exhibit No, 40 and pos-
siblv to No. 41, ‘but particularly to Exhibit Ne. 40.
In other words, we merely want the underlying working
papers for Exhibit 40. T believe that counsel on the other
side_of the table will agree that Mr. Morton’s. working
papers to be furnished, and additional data, such as esti-»
mates of revenues, dc not have any relation td. Exhibit oe.
but relate particularity to Exhibit 40,
Trial Iixaminer: Referring to- Exhibit 38, 1 will ask
counsel for Panhandle. Eastern : Pipe, Line Company
whether the sums shown in Line 26 comprise merely a part
of the sums. which have heretofore been charged: to the
aperating expenses of fhe company and its subsidiaries?
: ¢ % *
.* " °
r ; ay 2
ONT
t ees Aen “1049
.
Mr. Culton: They include ‘i thaltiee- hek gak oie
the excepted-items yelating to A Argus, the Loca? Area’ and
the transportation of gas.
~Trial Examiner: But they do constitute a part of opera-
ting expenses whicli have. heen charged, as such, on the
books of the company? .
[fok: 331 3] Mr. Culton: That is correct.
Trial Examiner : And the segregation of a part is only.
. for the’ purpose of allocation to estimate what you term
‘the cost. of cee. the business’’ ee
Mr. Culton: That is right, the vost of carrying the
unused eapdacity.
Trial Examiner: Exhibits 40 and 41,:so marked for
identification, will be received without objection. :
° eo: . co oe a) . e- @
Trial Examiner: The objeetions of Commission Coun-
4
sel to the reception of Exhibit 38, will be overruled and —
this exhibit will be received for what it nay be worth,
although there is, #® the view of the Trial Exaininer, con-
side rable merit in the objection..
The. fundamental hain stated in the objection will, of
cofirse, he given consideration when the. evidence is re-
viewed.
°
{fol 3316] P. Me Dos D Bippison, a Witness, having pre-
{fol. 3317] viously beef duly sworn, resumed the stand
and testified further -ag follows: ‘
*- ie ee ae <a
(fol. 3334)/ Mr- Littman: I wanted to be straightened
out on just what Mr. rae aim was referring -to when he
referred to the cest of developing the business, whether
he was referring to the two itéms or one; yvamely, spay:
ments to utility companies and, carrying. costs Gn’ that
portion of plant idle pending development of business.
« , * * * Re. canta
1O50 -
The pits ~T refer to the sur of the two.
iv Mr. Whea "plea “2 EGER. tos
QM. As a by you in your exhibit, what?
A. -Well, I have used it in Exhibit No. 39 and T have —.
‘3 TT | it in Exhibit fie, ;
Q.. At least, vou .have used it’ in these two exhibits
Whieh alread’ have heen made the subject of a refusal
order by the ‘Frial Kxaminer, is that corréet?
°A. That is correct. eae
* * ee cr * TE *. ° Gas 4
-[fol.8574]. PL McDonap Bippison, a “witness, having been
previously sworn, resumed the stand and testified as
follows: | >
Redirect Examination (Continued)..
. o .. -) = “¢ . e
rte Mr. Littman: (Interposing) Pardon me, Mr.
Culton. é a ran .
Do you mind i! I ask.one porercon to clear up some thing? “
Mr. Culton: Go ; ahes ad. ;
“Mr. Isittman: Mr: Biddison, with respect to the break-
down by vou just referred to in ‘Exhibit 89 from Page 156
to 350, did you use that breakdown in connection with mak- g
lag vour de te rmination of de ‘preciation?
The Witness: Yes, sir, [ did.
Mr. Littman: To what extent? Would you mind telling.
us to what@xtent you used that ‘breakdown?
oa Ra F ;
The Witwess : This ‘equipment in’ Exhibit Mo. 39 is.:
summarized (py classes af use and eeeaon on Page 155
of xhibit NOESY. Seay “ | :
That Summary is a summary of the data on the. sué
eooding. pages which details the installations and that sum-_
Mary. on Pas? 155 is the data shown in Coltmn B and.
Column Avon Page 19 of Exhibit 62, apd it iS the data
to which, in my working papers, I made application of the
figures of | bianca ies to be dediteted for Hepreciation..
Rie
a ne atin Os mins
onset --we eer *
’ , ° . 3 : o
Se te qudttiagsitp
et
antes
1051"
a
©
Mr. Littman: Do I understand that you arrived at a
‘pereent of deprecjgtion for each and every item of equip-
[fol. 3580] ment fsted on Pages 156 to 350, inelusive, of
. Exhibit. 39% mes we
* -'Ehe Witness: I.do not know whether you understand
ctdat or not, but I want you to qistinetly understand that-you
“should not understand it that way, because I have ex:
plained it otherwise. ;
I determined an amount-in percentage to be deducted
for depreciation for each class and location of property in”
the tecapitulation sheet on Page19 of Exhibit 62.
Mr. Littman: In other words, you workéd from the re-
capitulation sheet. shown on Page 19 of Kxhibit 62, rather
than from the details shown’ from Pages 156 to 350?
The Witness: That is right. The things which I saw
are the details which are shown in the various pages of
Exhibit No. 39, ;
The things to which ‘I apptied my percentage, resulting
froma those observations, are the ijems appearing if Col-.
win Boon Page ‘19, E:hibit 62: | ib
a « ° . * + es ®
?
(fol. 3638] By Mr. Wheat:
*. * * ° ° ° * -%
[ fol. 836391 Q. Now, Mr. siddison, when approximately did
[fol. 5640) you make the inspection to which you have fes-
“tifidd with respect. to the company’s pipe line. .
A. “This inspection began, starting from Amarillo on
August 17,1941. | continued over the-system to its cast-
ern end, reyirning to Kansas City upon August 26, 1941.
<a did not do ny inspectiig on Sunday, the 24th ‘of
August nor upon Thursday, the 21st of August. I did,
at a.later date, however, ispect Louisburg compressor sta-
tion and Olpe compressor station.
Q. Did anyone accompany you on this inspection jrip?
A. Yes, sir, I was’ accompanied by-two engineers.
Q. Please state their names’ . Papier
A. Of the Federal Power Commission’s staff.
erm OO Oe te te nant? : ; =
*T Ooh wots 5 5 a ;
ee ae > 3 7
e - . : ¢.
(). Who were » they? .
_ A. Mr. Shattaék and Mr. ‘Bodner, pane they aid. not:
accompany me up” iny inspection of Louisburg station |
and Olpe statian. >
(). Now, prior to the commencement of this inspection
‘trip’on August 17, 1941; at Awarillo, Te ‘Xas, had- there ©
been any diseussions of such an-‘imspection and, if so; what.
"were the ‘y, and please detail for the reeord what the situa--
tiod Was in that respect? —- ‘
A. 1 began work on this Panhandle isantien situation
in preparation for this hearing on July 22. at. which time
I attended a conference in Kansas UC ity. r"
a * . ‘* . *. ‘“ ¢@ ee
: fist |
{ fol. 3641] Q. Gene rally, W ho 1 was present ang what was
the nature of the conferente? © © Es
A. ‘I eannot give a list of. those present: beeause I do,
not have such a list.
_ Do you remember, in general, who were there?
A. Well, I know, of course, that-I was there, and that
Mr. Burnham was there, Mr. Creveling, the president -of
the ¢ ‘onpany ; Mr. Paxton.
Q. .Who is Mr. Paxton? -
A. He he ads their’aeeounting foree from ‘Kasear™ City.
Tle is sectigtary wars big ae believe, is his title.
Mr. Neuner, the operating vice-president, was there. I.
believe Mr. Glenn Clark,- the company’s . attorney, was
present at the conference, and'I believe Mr. Carl I: Wheat
and Mr. Dom Culton were present at that conference. .
- ‘ an
*. > * . -* 7 . > -*
Q. Yes. What was the general nature of. the conference?
[fol 3642). A. The general nature of thig} conference
was to discuss the/question of how to prepare for- this
hearing on ‘which a date had been, at leastetentativ ely, set:
-Q: And was anythingdispussed at that conferenge with
reference to the inspection of the company’s, physical
| properties for the purpose of determinitg the amount
of depreciation or loss of value which had occurred there-
in? -
- A. Yes, that matter was discussed, ‘and it was under-
stood, as a result of that conference, that I’ would make
the inspection and that the representatives of ‘the Federal
s
¥
:
f.
vy , sunt
NE GAS SIA
i aioe
ern a oe ae |
Prod ip latnhn® Fh, ley
1053
°
during that inspection,yliatever I saw. ,
Q. Do you know,.Mr. Biddison, whether a communica-
tion was addressed by the Panhandle Easter, Pipe Line
Company to the Federal Power Commission in connection
with or inviting representatives of the Commission. to ac-
company. you on this tour of inspection! °
‘A. I know it was understood at that *conference that
that would be: done. and that. stibsequent events indiated
the invitation had been extended. 9. >
- Mr. Wheat: I would: like, Mr. Examiner, to read this
short-letter into the record and I will hand the copy to
the reporter,and it is understood with the Commission that |
-if, on examination, it does not check with the copy they
received, we will discuss the matter. and make the check. 3
[fol., 3643] Trial“Examiner: Very well.
Mr. Wheat : All fight, sir:. ae
This i is dated Jaly 23, 1941. — * | |
“Federal Powér Commission, W ashington, N. €.
Attention: Mr. Leon M., Fuquay ae ae
Re: City of Detroit. and County of W avne Vs, P: —s
Eastern Pipe Line Company - and Michigan - Gas
Transmission Corporation—Docket No, ‘G-200.
“Gentlemen: sn
y j — ea. { ; -_ | A
‘In connection with the above proceeding, Mr.*P. Me-
Donald Biddigen, Consulting Engineer, Dallas Gas Build-
ing, Dallas, Texas, is making a valuation of our phy sieal
properties. Commencing on or about August- 4, he will
make an inspectioe tour for the purpose of determining,
the present conditie' of these properties, and during this
tour he Wilk inspeci portions of our pipe lines which are
“to be’ utcov ered at Variows locations designated by him.
“Thinking that the, Commission, through one of its en-
gifeers, night wish to observe the condition of these prop- -
erties in connection with ‘this case, or in conneetion with
its own investigation under Docket :No. G-! 207, we invite
you to designate some member of your staff to accompany —
Mr. Biddison on this tour. His transportation over our
®
& . “4
Power Commission would be given an opportunity to see,
—
_dated July 23, inviting ‘a thember of the Co
54 rear Be ibs coon ©
sy stem. w oald be provided hy .thiis company and pore he
desire to inspect portions of our pipe lines: not ‘uncovered
for the. purposes of this inspection tour, we will be glad
' [fol. 3644] to cause such other. pertiome to be uncovered ;
for his inspection. .
. “Tf vou desire to avait yourselves of this épportunity to~
inspect the physical properties of this company, please
give us the name and address of the one vou designate to —
“make this trip and we will have Mr. Biddison ¢ contact him
as soon as possible. ;
‘ _ Mery truly yours,’
I believe it was signed by J. D. " Creveling, as president
of the company. >
By. Mr. Wheat oa ;
' Q. Now, Mr. Biddison, ie you know whether the Pan-
ai
_handle Eaktern Pipe Line <Cémpany received, an. answer
to that letter from the Federal Power C ommission?
‘A. Yes, I saw a reply, # telegram which T think was ‘in-
reply to the letter which you have read.
Q. Well, is the letter which T show you under the lett
he: d of the Federal Power Commission the neta itself? -
A.” Yes, T have previously seen that Jetter: pe.
aa, E's oe . *. ° aren _* i) ‘
Mr. Wheat: This letfer is under the letterhead of the
Fede ral Power : ‘Commission, W ashington, dated July 26,
1941, ge . : .
[fol, 3645! Mr. J. ‘D/ Creveling, President,
ae at Jastern Pipe: Line Company,
1221 Baltimore Avenues. *~ oes:
Kanias City, Missouri.-- |
Re: Doe ‘ket No.G-200, P anhandle-Kasterm Pipe Line Con:
“pany and Michigan Gas Trandiission Corporation
Ded Sir: y ioe ey
“This is to ‘ac cknowledge roost of your
communication.
to accompany Mr. Biddixon in an inspection! of your prop-
erties in connection with the above investigation.
“Mr. H. Zinder, Chief of the Division of Rates and ‘Re-
search, will be in the. field and in the vicinity of Kansas
civ aperee
nission’s staff:
po AN AEN RL, PATA HEL YS
\
.° : .
- -
« ~ 2
\ ’
2 it hick an
City the week, of July.28. In view of this fact, Mr, Zinder
has. ay requested to call upon you Saturday morning,
** August 2, on Ms artival in Kansas City and ar range for
a meeting with you to discuss this matter. It would. he:
"- ad¥isable if Mr. Biddison could be present at ‘such a meet-
ing, so that. questions. or procedure on the inspectign, num-
ber of .insnections contemplated, and-the plans’ ‘geticrally,
inay be distussed. Fotlowing this eonference and Mr. Zin-
der’s. report, a ‘decision will be ,redehed concerning. the
nature and extent of the ¢ ‘qmimnission ’s pirtieipation m -
the inspection. x me I ee
46.8
“Tn view of the above citeumstances, it is ‘suggested that
arrangements for the commencement of the inspection be
delaved from-August 4 antil August 18. This would per-.
mit’ Mr. Zinder time to return to Washington and to make
(fol. 3646] whatever: arrangements’ are necessary for
“some ,members of the — to. reach Kansas City for, the
Start of the inspection.
“IF the alieve arrangements are s satisfac tory; please con-
firm them, by’ return. wire:
\
Yours verv _ uly,’
(Signed) L, EAN M. FU QUAY,
Secretary,’
I have also here a carbon eopy of a te legram:
etic. : _ ‘from “Kansas C ity, Missouriy
~
ad 3:58: P:. Me
or M, Suday, Secretary ‘)
Fedéral, Power Commission , : X F
‘ : July ‘28, 1941,
: Waghiington B.C.
sixth satisfactory. Will be -glad to fee Mister Zinder. Sat-
-urday mornmg — August, second,
“Arrange ments suggested in’ vo fea of the twenty-
(Signed): PANHANDLE. BASTERN
| mint . PIPE LINE COMPANY
Pe ake By G.J. Neuner,. Vice President.”’
‘That is, _ also subject to counsed’s check,
By Mr. Wheat: — SEE ere Ene, e.
Q. ‘Now, Mr. Biddison, as a result of the passage of
letters between the company and the Federal Power Com-
Fo a os e
6 _
°
a7]
eee re ee a ae _
7 1056 - r " ~ ; ee - i ‘
mission, was a conference held in | Kansas City with Mr. >
Zindér present} — : ;
A. . Yes, sir. » .
(fol. 3647] Q. When 4 was that held?
A. On August 2nd. «
- ‘Who van reve there, so far as you can remember ?
Mr. Neuter, Vice ‘President of Panhandle Eastern
4, ipe Line Conmpany, | Mr. Glenn Clark, attorney for Pan-~*
handle Eastern Pipe Line Company,
| believe Mr. Don Culton,- counsel for Panhandle Eastern
Pipe Line Company iu this case, was = at that meet-
5 ing. ‘ee . ss «
>T was presemt, aud Mr. Zinder and Mr. Mcallister of the ;
Federal Power Commission were present.
{): Members ‘ot that Commission’s ‘staff?
= Yes, sir.
Now, will vou relate briefly your recolleétion of what,
W as eee With respect to the inspection in question? i
A. 1 outlined about the. number 6f inspections that 1°
antiéipated making and | had a map somew hat°similar to
thewmap that hangs on thew f.. ;
()... Exhibit 15? *
s
A.” Exhibit 15 in this case, on which, on the main.line |
avstem, I had. indice ‘ated, generally, the locations of some.of
the points at’ which J wished to make inspection.
d \expisined that I was making. provision for that nuniber
of inspections which | thought it. woufa be*desirable to
make of such a property. in case of a purehase énd sale
and did not piopose a large number of test holes.
(fol. 3648] L advised thad I had indicated, generally, cer-
tain locations upon this map and suggested that it would be
advisable for representatives of the Federal Powe Com-
inission make additional locations equal to. half *’.e loea-
tions whieh T had selected. _ . '
; They asked for w Copy Laaa' © ,
(). (Inferposing) When ‘vou -say-‘‘they,’’*who do you
mean? J rahe
A. Mr, Zinder:and Mr. McAllister. Which one made the
request specifically, I do not know. It was sort of a ‘joint
request that they be furnished: with a copy of that map and ~
~~
< 4
“yeni,
et
ee ee ee ee ep aeee
teat en ee
1057
thaf the alitter of Ipeating such additional test holes wad
then be referred to engineering numbers of the staff, of the
‘Federal Power Commission. — . 4
Q.. Mr. Biddison, right there, did they express any dis-
. satisfaction, with the number ‘of test holes tha’ you pro-
posed ?
- A. ; On the contrary, path Mr. McAllister ane Mr. Zinder ,
expr@sed satisfaction with our viewpoint hat & Jarge -
number, of such inspections Was not necessary for thie de-
termination of the facts ativamse to this kind of an investi-
cation. ° pated
Q. For adeqtate. sampling ofthe propesty?. ?
‘A. That ‘Is right. .
Mr. Gorman: ‘Do you, by your answer, ‘intend ‘to indi-
“ eate they [they] thought that was a sufficient number and
| fol. 3649 F sufficient —o termining depygriation in the*
-property! ?| ‘2 -f
The Witness: I am not trying to indieate anything. 1 am
; simply telling what happened.
‘Mr: Gorman: Yes. I did not want any improper inference
to be given to vour statement. ae is
“Me Wheit:. I am sure no improper inference could be
drawn from the statement of the witness.
ty Mr. W hea Sak ot ip
‘Q. Was suything else said about the number of test
holes f ! a vi °
A. ¥es. A comparison. was made during that diseussion.
as to owr viewpoint on that matter in the light of the large
“umber of holes either dug or planned to be dug by some °
.other natural gas ufility having <ases pending ‘or under-
going hearing before the Commission. .
‘Q. What was said in that connection?
° ‘
. * . . * 5 . gh ‘* A oi °
\ :
\
In your answer, Mr. Biddigon, vou. said ‘‘in view of that |
‘imatter.’’ By. “that matter,-* ¥ou meant what?
. oe oe y ;
“6712.86 : \
\e
Po
e
*
TOSS SY ee ‘ : 6
The Witaess. Our Wiew as to the maiter ‘of how many
test holes were to be dug during ‘this inspeetion,
° »
. J a) e eo. */ °’- « ®
By Mr. Wheat: es
(). What was said in connection with, this item vou just
mentioned, some finer company havingtoa many test:
holes? ; ; iv
[fol 36501. A. Fe: innot ‘sand a quotation on that, although ©.
Tecan sav in regard to'what wa said on the, matter, the
idea was expressed by these gentlemen that we had eye
ed a logical procedure
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